A Note to Occupy Wall Street Protestors

Many people are ticked off and I can’t blame them. The problem is that many folks don’t understand the true source of the causes of the current social and economic problems. “Capitalism” (the private ownership of capital) is not the source of the problems. The true sources of the current problems are primarily three-fold:

1. Crony-Capitalism – this is when big business gets into bed with big government to gain special favors and restrict their competition to the detriment of everyone else resulting in higher prices, less innovation, less goods and services, and the resultant lower standard of living. “Capitalism” or “Free Market Capitalism” hasn’t ever really existed in the USA. The closest the U.S. came in history was soon after the American Revolution – when people were left free to make their own decisions as to how to run their lives. What we have in this country now is “Crony Capitalism” (sometimes referred to as “Corporatism”) which is fast becoming Fascism.

2. Coercive Government – Governments squander resources, interfere with the market, redistribute (steal) wealth, provoke conflict, engage in wars and mass murder, and crush individual freedom of choice.

3. Lack of Self-Government and Personal Responsibility – Be careful in asking for more government regulation.  This is what Robert LeFevre referred to as “the pagan faith in the state”. The solution to these economic and social problems can be found in the essay A Way To Be Free – if you dare to look.

“Be careful whom you make your protectors lest they become your jailers.”
- Unknown

“Everything the State says is a lie, and everything it has it has stolen.”
― Friedrich Nietzsche

Long Live the Limited Liability Corporation

By Bill Frezza

What does it mean when angry mobs take to the streets not to protest against the specific corporations and politicians that teamed up to loot the federal Treasury, but to challenge the very purpose and existence of corporations? Is it nihilism or ignorance that makes these people want to extinguish the organizations that provide the food that they eat, the clothes that they wear, the homes where they live, and the jobs they claim to want?

On the chance that it might be ignorance, let’s take a look at what a limited liability corporation is and does. Perhaps this might penetrate the fog often spread around this misunderstood topic.

First, limited liability does not mean no liability. Executives and employees convicted of crimes can still be sent to jail, and often are. What it does mean is that the third party providers of capital that enable a business to grow stand to lose only the amount of money they invested in the business, and no more. That is why if you buy stock in a company that later goes bust, the bankruptcy judge cannot go after your paycheck to satisfy the company’s creditors. Imagine managing your IRA if, as part owner, you were fully liable for any debts incurred by each company you invested in.

In addition to making debtor’s prison obsolete, the legal concept of limited liability has liberated more people from premature death, disease, and poverty than any other economic innovation since the end of feudalism.

Prior to the invention of corporate structures that allow companies to operate behind legal firewalls protecting third party investors, it was difficult to achieve scale in any business that required large amounts of capital. This may not be an issue for subsistence farmers, independent craftsmen, sole proprietors, closely held partnerships, family dynasties, landed nobility, or the King. But without modern corporate forms that concentrate capital from disparate shareholders, the industrial revolution could not have occurred. And without the industrial revolution most of humanity would still be bound to the land – rising with the sun, going to bed when it sets, and laboring like mules in between.

Utopians may idealize our agrarian roots, but there are good reasons such yearnings are confined to utopians.

First, our ancestors did not flock from the farms to the factories because farm life was so peachy. Voting with one’s feet to escape the drudgery of living off the land is a process that continues in developing countries to this day. Progress is all about substituting machines for backbreaking labor. Ban the limited liability corporation and you reverse that process.

Second, a pre-industrial, corporation-free economy cannot support the billions of humans that currently live on planet Earth. Just who would you kill off in order to return to our noble agrarian past? I know an Al Gore-inspired environmental activist who openly wishes a flu pandemic will decimate the human race. Such intellectual consistency in a hardcore progressive is as rare as it is horrifying.

State ownership of the means of production has been tried as an alternative method of industrial capitalization. The misery that ensued makes the death toll from flu pandemics look mild.

The judgment of history is in. Never before have so many owed so much to such a misunderstood form of economic organization. And never before has such a beneficial innovation been subject to such constant criticism. Most people take the modern cornucopia of goods and services produced by corporations for granted. But if you were to go 48 hours without them you would look, smell, and feel like the people camping out for days in Zuccotti Park.

If you want the perfect example of the positive impact of the corporation, turn your eyes from Wall Street and take a look at Wal-Mart. When you consider the outcomes, there is no denying that Wal-Mart has done more for the poor than Mother Theresa. After all, Mother Theresa only salved the wounds of a comparative few, most of whom continued to live at a level of abject poverty unknown in developed countries. Wal-Mart provides a steady paycheck to 2 million people, many uneducated and unskilled yet organized into an effective workforce that delivers tremendous value to hundreds of millions of cost-conscious consumers. These consumers include the working poor themselves, whose dollars otherwise would buy a lot less. Everyone who shops at Wal-Mart is better off than the slum dwellers of Calcutta.

In addition, Wal-Mart’s global supply chain employs tens of millions of people around the world, freed from the land as they climb that first rung up the economic ladder. And that ladder was built with capital that came from millions of investors thousands of miles away. They felt comfortable investing their savings because they didn’t have to risk more than the price of their shares.

So the next time someone around you mouths off about corporate greed, ask them to be more specific. If they are ranting against bailout recipients and the politicians that keep shoveling our tax money into their maws, you may want to join them. But if they’re ranting against the corporation itself, you may want to speak up in defense – for the decline of the limited liability corporation will mark the decline of civilization as we know it. If that happens and you don’t want to starve, you’d better make sure you are handy with a manure spreader.

Bill Frezza is a fellow at the Competitive Enterprise Institute, and a Boston-based venture capitalist. He can be reached at bill@vereverus.com. If you would like to subscribe to his weekly column, drop a note to publisher@vereverus.com or follow him on Twitter @BillFrezza.

Source: http://www.realclearmarkets.com/articles/2011/10/17/long_live_the_limited_liability_corporation_99313.html

Conference Call Notes – July 24, 2011

Conference Call Resources:

http://www.BitcoinTraining.com

Why I’m Putting All My Savings Into Bitcoin:

http://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/

Bitcoin is the Economic Singularity:

http://astrohacker.com/ahc/bitcoin-is-the-economic-singularity/

Man From the Future Shares His Story:

http://www.libertariannews.org/2011/06/29/man-from-the-future-shares-his-story/

Privacy and the Digital Revolution (.pdf file)

AgoristRadio.com – recommended shows: 5, 11, 12, 15, 19, 26, 35, 42, 43, 44,

As the Authoritarian State Expands, Learn to Talk in Code

My Philosophy of Liberty

TorProject.org

TrueCrypt.org

Invisible Offshore Corporations, Trusts & Foundations

neo_bullets2

Traditionally, LLC’s, Limited Partnerships and Corporations have been the primary tools for protection and capital accumulation for entrepreneurs. These protection benefits have been provided by nation states within their respective jurisdictions and with reciprocity between these nation states.

Now cyberspace has become the ultimate offshore jurisdiction – complete with its own rules, laws and protection services. The tools of cyberspace have matured to the point that they can now enable you to provide for your own protection through privacy and anonymity.

The Dawn of the Cyber Company

These new structures known as “Cyber Companies” are not registered nor are they recorded in any physical jurisdiction. They exist solely in cyberspace by their declaration and use.

Rather than relying on protection by any government, the Cyber Company gains its protection through its methods of operation. Using anonymous hosting, anonymous communications, and anonymous crypto-currencies, these Cyber Companies can now provide for their own protection.

These Cyber Companies are perfect for

  • Stateless Persons
  • Digital Nomads
  • Mobile Entrepreneurs
  • Perpetual Travelers
  • Persecuted Minorities
  • Global Citizens
  • Publishers
  • Writers
  • Consultants
  • Musicians & other artists

Here is a fascinating Case Study of a Cyber Company and it’s subsequent downfall:

Silk Road: The Underground Website Where You Can Buy Any Drug Imaginable

Silk Road fell due to a catalogue of errors

Tracking the Silk Road – Lessons for darknet services

A virtual corporation can be owned by a virtual foundation or virtual trust. You can join a discussion in our Members Forum for ideas. Please read the following essays for important insight and historical background:

The Crypto Anarchist Manifesto

Traditional Privacy Joins The Digital Revolution

Crypto-Anarchy and Virtual Communities

Video:

Financing the Revolution

 

 

 

 

 

The Revolution has begun…

You’re probably wondering why there has been so much buzz about bitcoin lately. In short, it puts you in control of your money and takes it away from the banks, politicians, central bankers and tyrants of the world.

The ramifications are revolutionary. The world will not be the same in a few years as a direct result of bitcoin.

There’s something magical about having your money sitting on your laptop or mobile phone which can then be transferred across the room or across the globe while completely bypassing the entire banking system at almost no cost.

Think about the last time you paid a credit card fee, ATM fee, checking account fee, bank wire fee, currency exchange fee, balance inquiry fee, cash deposit fee, credit card fee, PayPal fee, etc., etc. Imagine never having to pay those again.

Think about the last time you had to provide a Social Security Number, 3 forms of identification, and give a DNA sample just to open a bank account or cash a check.  Bitcoin bypasses all of these.

Yes, bitcoin is a little difficult to understand initially, and it is not the most user friendly at the moment but that is all changing at lightening speed.

To get a quick feel for it you can easily open an account at  www.mybitcoin.com while you study and learn more. From there you can move on to downloading the software so that you can actually store your money on your computer. Then you can continue to increase your knowledge on the finer points. New tools and resources are coming on daily that will help make this transition easier.

Actual bitcoin money is a little difficult to acquire right now but there are several sources at http://www.bitcoin.org or you can contact us for a recommendation.

The opportunity is before you to, not only gain more freedom, but to profit by figuring out what products and services you can begin offering to the growing bitcoin community. It reminds me of The Great Oklahoma Land Rush. A whole new economy has opened up and there are numerous opportunities to be the “first to market” with your product or service.

Here are a couple of news links about bitcoin and a link to some great economic analysis as well:

Bitcoin is Economic Singularity
http://tinyurl.com/44zoplu

New Decentralized Currency Stimulating Underground Barter Economy
http://tinyurl.com/3fektol

Several Articles on the Economics of Bitcoin:
http:///www.economicsandliberty.com

The revolution as begun. Are you going to be a part of it?

Bitcoin is Economic Singularity

By Astrohacker
Saturday, June 4, 2011

http://astrohacker.com/ahc/bitcoin-is-the-economic-singularity

Three weeks ago I discovered bitcoin. It sounded interesting enough that I decided to devote an entire Saturday to it—that was my “day of bitcoin.” My day of bitcoin evolved into my three weeks of bitcoin. In that time, I have been obsessively reading about it, writing about it, buying it, and creating businesses for it. As far as I can recall, I have never been so obsessed about anything. But the reason I am obsessed with bitcoin is simple: it is the most incredible thing to ever happen in the world. I am not exaggerating. We are presently witnessing the most disruptive change to ever happen to collective human behavior. Although there have been other disruptive changes to human behavior in the past, bitcoin is happening much faster than those. Consider, for instance, computing. Charles Babbage invented the mechanical Analytical Engine in the 1830s. It took on the order of a century or more before those seeds of an idea blossomed into something that actually started being used on a large scale. Or consider, say, the internet, which was invented in the 1960s, but took on the order of decades before it saturated the world. That was faster than computing, but still long compared to bitcoin. Bitcoin was only invented about 2.5 years ago. And already, I have been able to ask random people about it, and they know what I’m talking about. If the growth of bitcoin continues exponentially like most widely useful technologies, it will only be on the order of years—not centuries, not even decades, but individual years—before virtually everyone is using it.

The standard term for such a rapid change is a “singularity.” Robin Hanson predicted an economic singularity. Bitcoin, as I will argue, is that singularity. (Hat tip to noagendamarket on the bitcoin forum for reminding me of Robin Hanson’s article.)

What is bitcoin?

Bitcoin is the decentralized digital currency. I say “the,” rather than “a,” because there can only be one. Since decentralized digital currencies rely on computational power to ensure security, the currency with the most computational power is the most secure. If we ever found ourselves with more than one decentralized digital currency, which ever one had more computational resources devoted to it would be the most secure, and thus more people would trust it, and thus more people would use it, and thus it would come to dominate and be the only one. Bitcoin is that currency. (Previously, I argued that there could be a market of currencies. However, I now realize that, while there can be a market of currencies, there can’t be more than one decentralized digital currency.)

Why is it gaining traction?

Bitcoin is useful for all the same reasons that any currency is useful: it is a medium of exchange. The advantage of being decentralized is that you do not have to rely on a third party for security. Thus, bitcoin is more useful than digital dollars for the same reason that digital dollars are more useful than paper dollars, or paper dollars are more useful than gold: it is just easier to pay people with them. No banks means less headaches, in the same way that no gold means there is a lot less weight you have to lug around. Bitcoin is thus a better answer to a problem humanity has been slowly solving for millenia: how do we remove barriers to payment?

There are other advantages to bitcoin too, besides being more convenient. The fact that no central party party controls the supply means no central party can inflate it to redistribute wealth in their favor. No one can debase bitcoin to pay for a war. Also, since it is deflationary (in the sense that prices reliably go down), it encourages savings, because everyone gets richer that way.

Exponential growth

Certainly, then, bitcoin is a candidate for an economic singularity, because everyone has incentives to use it, and it makes the world a better place. That’s great in theory, but the reason why it cleary actually is a singularity is because its adoption is, in fact, growing exponentially. There are at least two exponential curves we can see. One is Google Trends, where bitcoin has crystal clear exponential growth. And another is its value in USD, where again the growth is clearly exponential. Although these quantities are not the same thing as adoption, they are probably proportional to adoption. 2.5 years ago, there was one user of bitcoin. We may estimate that there are somewhere between 104 and 105 users of bitcoin at present. Thus, in another 2.5 years, there will be somewhere between 108 and 1010 users. Since there aren’t even 1010 people on the planet, we may estimate that adoption will be ubiquitous in approximately three years.

Attack vectors

This incredibly rapid exponential growth is being powered by the fact that people around the world are quickly learning about it. Thus, the exponential growth can only last until it saturates the world, at which point it will continue growing only at the rate that humanity grows (which is also exponential, but much slower). At present, there is no reason to think the growth will stop before that. There are no credible attack vectors at all; not even government (the US government or any other) can stop it, because the economic incentives are too large. A War on Bitcoin would have exactly as much efficacy as the War on Drugs: none. Bitcoin is susceptible to DOS attacks, but that would only slow its growth, not stop it. The only credible threat to bitcoin is quantum computers, because bitcoin relies on classical, rather than quantum, cryptography. But that threat is many years away. Bitcoin will be ubiquitous by then.

What will happen?

Bitcoin will take over as the currency of the internet. It will also take over as a store of value; why earn a measly, less-than-inflation interest rate in a savings account when you can have steady appreciation of value if you just keep your money in bitcoin? People will spend less and save more because they know if only they do that, they will be richer in the future. Companies will no longer produce things of no value, because no one will buy them. The world will become more efficient, because there will be less waste. Everyone will realize how much they lose by spending money on valueless things. There will be a more equitable distribution of wealth, because no one can inflate (or, to use a less charitable term, counterfeit) bitcoin at their whim.

Bitcoin will also take over any fiat currencies that inflate too rapidly (think Zimbabwe, Argentina, or any other country that presently has or will have a rapidly inflating currency). Central banks will be under enormous pressure to stabalize their currencies or become obsolete. Many banks will collapse. Many fiat currencies will become worthless. Probably, all fiat currencies will become worthless eventually, because it is only a matter of time before the central banks fall into the temptation of inflating their currencies just a bit too fast.

How to proceed

Since bitcoin appreciates in value very rapidly during the singularity phase, you should convert all of your liquid assets to bitcoin as quickly as possible. Do not keep any cash, savings, or checking beyond what you need to pay for goods and services that cannot yet be paid for with bitcoin. The more things you can buy with bitcoin, the more bitcoin you should keep.

Stop wasting money on excessively expensive meals, televisions, cars, and anything else that loses value quickly or instantly. Instead, put your money into bitcoin. You will be much richer that way. You may think having less stuff is less fun, but actually the pleasure of financial freedom far, far outweighs any losses.

During the singularity phase, you should also take out loans to buy bitcoin, since bitcoin appreciates far more rapidly than interest on any fiat currency loan. When bitcoin gets near saturation, which is the end of the singularity, you should pay off the loans, because at that point the rate of appreciation will probably be a lot closer to the interest on the loans, and you may not be able to reliably earn money that way anymore.

You may also be tempted to convert other assets to bitcoin. If you are invested in anything that is likely to be bitcoin-unfriendly, like a bank, it would be wise to convert those assets into bitcoin. However, if you are invested in companies that actually produce value, those companies will thrive after the singularity, so it is not necessarily a good idea to convert those assets to bitcoin.

If you own assets where the ownership of those assets is certified by a country that is likely to collapse after the singularity, such as if you owned land in a country where the currency is rapidly inflating, you should consider converting those assets to bitcoin, or risk losing it when your country’s government collapses.

If you own a business, you should start accepting bitcoin as quickly as possible to maximize your ownership of the bitcoin economy. If you don’t own a business, consider starting a bitcoin business. See my previous post to learn more about bitcoin startups.

Conclusion

The economy is going to change very dramatically in a matter of three or so years. You are likely to be doing a significant amount, if not all, of your economic activity in bitcoin very soon. The change will be as dramatic as, say, computing or the internet, except that it will happen much faster. The change will be for the better, since it is more convenient to use bitcoin than fiat currencies for digital payments. Fiat currencies may stick around if they do not hyperinflate; they will probably still be useful for buying coffee. The most interesting change is that we will all become more motivated and productive, since we will see very clearly how our work ethic affects how rich we are. And the world as a whole will be significantly more efficient, since it will be extremely difficult to finance huge wastes of money, like wars.

Personally, I have invested most of my savings into bitcoin, and am in the process of figuring out precisely how much more it is wise to invest. I have not yet taken out any loans to buy bitcoin, because that decision is too hard to swallow (I may yet do it if I can stomach it—Falkvinge did.) I have also begun producing bitcoin businesses which I am hoping will support me after I graduate. (My bitcoin savings alone will actually probably be enough to support me, but I will be richer if I work too.) Most of the other ideas I had about what to do with my life after graduation have gone into the toilet—I will probably do something with bitcoin.

In the future, books that summarize the history of money will have a line that says, “and then came bitcoin.” It is the economic singularity. And we are living in it now.

Reprinted with permission. Donations to Astrohacker appreciated: 1CU8KRSTcrYKyjfeGRTjpJ1S57jViwqrnh

The Coming Attack On Bitcoin And How To Survive It

From EconomicsAndLiberty.com:

By Anthony Freeman

(This article is the third in a series on bitcoin. Read parts 1 and 2 here and here.)

With bitcoin gaining mainstream attention the coming attack on its users is inevitable. In this short piece I will explain how it is likely to unfold and how you can survive it.

First, a little background:

In 1996 E-gold was one of the early entrants to the market with a private, global e-currency. They achieved stellar growth and widespread attention – much like bitcoin today. Accolades came from freedom-lovers everywhere. They were the “Great Gold Hope” that would free the people by freeing the money. Privacy-enthusiasts, libertarians, gold-bugs, autarchists, anarchists, voluntaryists, drug-dealers, and even unsavory types flocked to it with praise and adoration.

Of course, the monopolists of the monetary system didn’t take lightly to this threat to their very existence. They came after the independent exchangers and e-gold with their full force and fury – eventually succeeding in convicting the key players for “conspiracy to operate an unlicensed money-transmitting business” and “conspiracy to engage in money laundering”. E-gold was fairly easy to take down because their operations and data-center were centralized and readily accessible.

Many folks who are now currently acting as currency exchangers for bitcoin will be the first to come under attack. Many will get hurt and possibly even imprisoned but, because of its decentralized nature, bitcoin will survive where e-gold did not.

If any of the large exchangers like mtgox.com are operating out of the US then it won’t be long before they are raided and shut down. Individual exchangers will be targeted as well – just to make an example and to scare others out of the community. This will create a giant “wet blanket” on the current enthusiasm for bitcoin and I expect the currency to take a major drop in exchange value when this happens. Not to fear though. Bitcoin will survive due to its decentralized “peer to peer” nature and it will continue to operate as an “alter-cash” resuming its growth albeit at a slower rate during the immediate aftermath.

To protect yourself I recommend the following:

You probably have a little more time before the attacks come (maybe a couple of months?) to acquire bitcoin with cash – and there are profits in speculation to be made until then but, when the raids come, expect a sharp correction before exchange values move on to new highs over a longer period of time. What you do not want to do is be involved as an “exchange service” conducting exchanges in and out of national currencies and you definitely do not want to have your money sitting in the exchanger’s account when they are raided and shut down.

Remember, e-gold was shut down for “conspiracy to operate an unlicensed money transmitting business”. Do not store any money in online accounts like mybitcoin.com in case they get taken down along with the exchangers. Keep all of your bitcoins on your computer with multiple, encrypted back-ups both on the cloud and on an external thumb drive.

The safest way to acquire bitcoin is to let people know that you will accept it as payment for your products and services. Do not ever exchange it for national currencies. The point that people miss here is that national currencies are the very problem that freedom-lovers are trying to get away from. Instead, use bitcoin to trade with merchants and individuals who accept it as payment. Offer it as payment to those who are unaware of it and explain the benefits to them. This will help develop the market and create a solid economy outside of national currencies. After the initial attack, bitcoin will likely be one of the most powerful and revolutionary tools to bring about more freedom and liberty to humankind.