Could The State Exist If Property Rights Were Impossible To Violate?

In a hypothetical world where it is impossible to take another person's property through force or coercion, could a State exist?

The obvious answer to this question is no.

At least not as we know it today. There could necessarily be no coercively funded State since all transactions would have to be through voluntary trade.

If we refine our question again, only limiting it simply to currency, could the modern State still exist?

I think the answer to this question is also no.

While a hypothetical world where violent and coercive looting could not exist is outside the realm of the possible, a situation where an "unlootable" currency exists is entirely within the realm of possibility.

Modern cryptographic technology has recently made anonymous peer-to-peer currencies a reality. Currencies such as Bitcoin make mass theft through taxation an impossibility for any government entity. While it may be possible for a government to disrupt or shutdown a peer-to-peer currency like Bitcoin, it can not institute a coerced system of taxation upon the currency. Given that we know such currencies now exist, it seems like it is only a matter of time until one is devised that can withstand even the most ardent government attacks against it.

Eventually a digital currency will emerge that is completely unstoppable and untaxable because the markets have deemed such a currency to be highly desirable. Thus, individual entrepreneurs will expend effort to produce such a currency in order to meet market demands.

Since we can say with a fairly high degree of certainty that a completely unstoppable and untaxable digital currency will come into existence, what does this portend for the modern coercively funded State?

I am personally very excited about what the future holds for us. Clearly humanity will eventually be forced to shed itself of State violence and coercion as the free markets drive lootable currencies out of existence. If we have a situation where the product of people's labor can be stored in a manner that cannot be coercively taken, war and the welfare State will come to an abrupt end.

Related articles I have authored on this subject:

How To Use Bitcoin – The Most Important Creation In The History Of Man
www.libertariannews.org...

The Economics Of Bitcoin – Doug Casey Gets It Wrong
www.libertariannews.org...

Libertarian Goldbugs Hating On Bitcoin – Free Market Money
www.libertariannews.org...

The Economics Of Bitcoin – Why Mainstream Economists Lie About Deflation
www.libertariannews.org...

The Economics Of Bitcoin – How Bitcoins Act As Money
www.libertariannews.org...

Against The Gold Standard
www.libertariannews.org...

The Ridiculousness Of Demanding Government Return To A Gold Standard
www.libertariannews.org...

"While a hypothetical world where violent and coercive looting could not exist is outside the realm of the possible, a situation where an "unlootable" currency exists is entirely within the realm of possibility."

Of course, but what if you had a currency system that even if you were to "loot" it there would be no value in it overall.

Bitcoin is a wonderful little currency alternative. However, overall it seems to have artificial limitations in which other alternative currency systems would overcome it.

A "perfect" monetary system would be one that can both inflate and deflate perfectly with trade. When the rate of trade increases the monetary system needs to be able to inflate. When the rate of trade decreases the monetary system needs to be able to deflate. When trade is not increasing or decreasing the monetary system needs to be able to replace itself in a balanced manner with trade.

The only way for a monetary system to perfectly inflate and deflate with trade is for the monetary system to be controlled by trade itself. Any form of centralization at that point would only cause imbalance in the system and a free market could perform better than any centralized power so it wouldn't last for very long. The only way to gain influence within such a trade controlled monetary system is to be the best at doing what you do and to continue doing it.

Here is an overall description of such a monetary system:

Inflation is based upon individual transaction. Trading itself creates inflation.

Deflation is based on a time (as it always is) over inflation ratio decided by individual creditors.

Every system needs starting credit, this system requires a steady constant stream. Such credit will be created through individual credit "minimums" of which an account cannot fall below. Every account deflates overtime based on the creditor's standards, but the account will never fall below this "minimum" line.

Creditors will set their own standards for the minimum (what the minimum can and cannot purchase) and deflationary rates (remember the inflation ratio).

Creditors will rise and fall based upon what standards they set as well as what investments they accumulate (infrastructure, new product/service, etc.).

The only way for power to be centralized in such a system is to be the best at what you do and keep doing it unless you wish for others to take your market share (customers, simple life folks and/or goal oriented folks).

Recap:

Inflation based on trade (individual transactions).

Deflation based on time/inflation ratio.

Credit minimums and its standards of purchase set by individual creditors.

Creditors rise and fall based on their standards and investments.



Anything else seems to be just another waste of time.

reply to post by Elzon


I disagree.

Any inflation of the money supply leads to a distortion of interest rates, which is the direct cause of business cycles.

See:

www.libertariannews.org...

and a video by Prof. Roger Garisson on the effects of interest rate distortion:

Originally posted by mnemeth1
reply to post by Elzon

 

Any inflation of the money supply leads to a distortion of interest rates, which is the direct cause of business cycles.

So, even if inflation is being counteracted by deflation it would have negative effects. Remember, this monetary system has got nothing to do with loans. The market as a whole may have loan contracts, but that has nothing to do with the monetary system described.

Today's monetary system is based on debt and the one being described is not. The monetary system being described is based on trade itself.

Perhaps you did not see the inevitable interactions that would have to occur in order for a monetary system to operate as describe, perhaps a recap then?

Credit is not transfered from consumer's account to a producer's account.

Credit is instead copied from the consumer's account and is set to the producer's account upon confirmation from both consumer and creditor, this creates inflation based on trade.

The only way someone loses credit is by the creditor's deflation rate.

The deflation rate of credit accounts is set by the creditors to remain competitive with one another.

If an individual creditor does not have good standards it runs the risk of having too much inflation therefore ruining its individual currency.

So yes, each individual creditor has it's own defacto currency, there is no central currency or central standards (other than what the market decides overall).

If you didn't see that would be inevitable when you originally read my post then maybe go back and think about it?

This is a VERY simple system, nothing complicated enough to warrant an hour long video or anything.

If you don't see how inflation is created through individual transactions I might be able to understand why you didn't understand it the first time around.

Think about it this way:

Today when I purchase something I give someone money and they give me a product in return. In the system described when I purchase something credit from my account will copy itself into the account of the individual selling the product.

In today's system inflation is created through debt (loans). In the system described inflation is created through individual transactions.

Today deflation happens through completion of loans. In the system described deflation happens due to individual creditors setting and maintaining a deflation rate of all user accounts they maintain.

This requires more than an understanding of macro and micro economic theory. This requires an underlying understanding of all previous basic forms of monetary systems. I'm talking about a monetary system not an economic system.

I hope that clears some things up. The monetary system being described has nothing to do with loan interest rates as it does not rely on loans and aims to do away with such systems as they would be inferior as a type of monetary system. Sure, there will still be loan contracts in the market overall, but the standard monetary system has nothing to do with loans.

Hope that helps?

reply to post by Elzon


My article and Garrisons lecture cover your issues.

reply to post by mnemeth1


What issues exactly?

Edit: Bitcoin is fine as an alternative, but it doesn't show superiority to any other money alternatives I have heard of other than our current debt based system. It seems any other electronic monetary system would do just as well. Bitcoin doesn't seem to be anything special to me and others.

Originally posted by Elzon
reply to post by mnemeth1

 

What issues exactly?

Edit: Bitcoin is fine as an alternative, but it doesn't show superiority to any other money alternatives I have heard of other than our current debt based system. It seems any other electronic monetary system would do just as well. Bitcoin doesn't seem to be anything special to me and others.

edit on 1-7-2011 by Elzon because: General edit and moar information

It is special.

It is the first electronic currency to solve the problem of double spending.

There has never been one like it, but there will be many more like it.

Debt based currencies are going away.

For good.

All states are based on the real and or implicit threat of violence.
Economic / currency controls are all just niceties, when these mechanisms start to fail is when people find themselves on the wrong end of a gun.

Yes, I believe it would be possible, although it would have to be voluntarily funded and would likely suffer hugely from the free rider problem.

Imagine what will happen when everybody realizes that private-property is merely a human mental jerk-off!

reply to post by mnemeth1


No, and the reason is that the only way to make property rights impossible to violate is to impose them with a government.

Remember there was a reason Marx called for the "withering away of the state."

reply to post by drakus


Well sure, it's a human category if that's what you mean. But you can't have an economic model without private property. If you don't have it then it doesn't belong to anyone, and if it doesn't belong to anyone then it is no one's. Ie. Untapped resources, what we had in the stone age.

So this "mental jerkoff" is what gives us civilization in the first place. Let's keep it.

I would have to say no a state or government could 'not' exist with people who have true rights.

However having a government is not all that great either.

Originally posted by Ajax84
reply to post by drakus

 

Well sure, it's a human category if that's what you mean. But you can't have an economic model without private property. If you don't have it then it doesn't belong to anyone, and if it doesn't belong to anyone then it is no one's. Ie. Untapped resources, what we had in the stone age.

So this "mental jerkoff" is what gives us civilization in the first place. Let's keep it.

Well, if it doesn't belong to anyone, it follows, it belongs to all of us.
Let's look at it this way: You say that if resources aren't privately claimed, will not be exploited. Why? If there's a need for said resource we would exploit it as we do now, only that the wealth (resource) gained wouldn't be part of a private individual profit, but would be used with the interests of the community in sight.
As in work cooperatives, the company belongs to all associated with the cooperative, and all have voice and a vote to elect the authorities. And the wealth generated is shared fairly (as decided by statutes voted in general assembly)

What's the argument to declare private, individual ownership of hundreds of square miles of cultivable fields that have existed for millions of years before and will be here long after we are all long gone? Such fields could provide food to quite a lot of people (ie: for a capitalists, there's demand), so the one who has claimed ownership of the land can extortionate his equals into giving him something to feed on food that without that need wouldn't be eaten... nice values there... And to get the food, manpower is needed, but does these people get the resources they generated with their work, noooo, they only get enough to survive till next workday and the rest goes to the "owner"...

I'll give you that we are way not ready for this kind of living, as it rests on values and principles that in our current system are relegated under the weight of individual profit-seeking and the values that mentality imposes on our society.
And this way of living would relie, too, on the concept that the human being is a social creature that is defined by the interaction with others, and that can't exist as a whole without others. And whose identity relies also on his connection with the rest of human stuff.

Off course, these words come from my own paradigm, which I have no intention to impose on anyone.
And I'd reckon it can be hard to understand for those educated under the capitalist paradigm.

Drk

Originally posted by mnemeth1
In a hypothetical world where it is impossible to take another person's property through force or coercion, could a State exist?

Not just a State exist, that entire world is actually a State.