LewRockwell.com emulates in the best way the Universities of old, a place where scholars come together to present ideas, debate vigorously, and learn to accept truths made clear through the reasoned arguments of their peers. One of my favorite lessons is Dr. Gary North's demonstration that "if you build a better mousetrap, the world will beat a path to your door" is utter rubbish. North has also pointed out that the mousetrap is essentially unchanged for over 100 years, because no one wants to touch a dead mouse to re-use a spring-loaded one, and so low cost is the feature most desired in a mouse-trap, one that the 19th-century design covers well.

Of course, as Victor Hugo once wrote: "On résiste à l’invasion des armées; on ne résiste pas à l’invasion des idées," which implies that armies are more easily resisted than ideas. A modern paraphrase is that there is nothing more powerful than an idea whose time has come.

This did not hold up well in the Greek Diaspora around the Mediterranean, of course. Archimedes, we now know from a palimpsest, was very close to creating the Calculus when invading Roman soldiers murdered him. The Antikythera mechanism was a proto-computer, close in componentry to Babbage's Difference Engine, if intended to calculate for a specific purpose, the heavens, instead of a general purpose. Heron of Alexandria invented a type of steam turbine that could be used to generate breezes.

And yet, with all these inventions and components of the industrial revolution so close at hand, the Roman Empire devolved into a brutal dictatorship, and an eventual collapse to a feudal society. Two thousand years of human progress were lost because there was no need to avoid labor, not with the Roman legions regularly subduing nearby nations and bringing back slaves to perform manual labor. As Jane Jacobs pointed out in The Economy of Cities, labor performed by slaves or women could not be economically improved upon, as it had no value, and so Rome stagnated in the areas where that labor predominated. Hilaire Belloc pointed out that one side effect of the gradual change from slave to serf to freedman was that the value of labor necessitated its being treated fairly, a change he credited to the Catholic Church's influence in the moral realm. The need to substitute machinery for human labor arose from this end of slavery, and the value imbued within each individual.

Better mousetraps are adopted when armies do not force other decisions, and when the spirit of the time is correct for them, as Jim Quinn and The Fourth Turning might well point out. In this regard, consider the work of the market, especially in ideas.

The Harry Potter books have turned their authoress, J K Rowling, into the wealthiest woman in the United Kingdom, even more wealth than the political means to wealth can supply Queen Elizabeth II. It has been 14 years since the first book came out, and over that time millions of children the world over have desired to see themselves as wizards, the especially brave and brilliant denizens of Hogwarts, a boarding school for wizards. Their non-magical counterparts are the Muggles, normal humans devoid of magical powers.

The world that Rowling created is described in some detail. Most interesting to an Austrian is the monetary system. In Harry Potter and the Philosopher's Stone, Harry takes a visit to Gringott's Bank, where he sees that his parents have left him a vault full of gold, guarded by goblins. He learns that the Magical World deals with coinage consisting only of gold Galleons, silver Sickles, and copper Knuts, in contrast to the money he has always known. While no one upbraids his economic understanding in this first book, Muggle medicine is brought to ridicule in Harry Potter and the Order of the Phoenix, when Mr. Weasley subjects himself to stitches instead of magical healing; millions of children laughed along at the folly of the Muggle way of doing things.

Laughter is a powerful tool of undermining the existing order. Boss Tweed might have remained in power, but for the mocking and muckraking of Thomas Nast's cartoons. As Hans Christian Andersen once pointed out, the Emperor can abide anything but the laughter of children at his nakedness and foolish ways. We must use the power of the young to ridicule that which is ridiculous as they build a better way in the world, with a sound, gold-based money. We must stop using the technical term "fiat currency" known to Austrians, and refer to it simply by the words that make clear to a new generation that it ought to be an object of scorn. Call it Muggle Money, let the children mock Bernanke, and the battle is half won.

Thomas M. Schmidt [send him mail], a native of Brooklyn, looks forward to the delightful tinkle of silver coins returning to the repertoire of the common purse.

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Perhaps you have seen crystallized the "revolution within the form" that is the current US political arrangement in Angelo Codevilla’s essay, “America’s Ruling Class — And the Perils of Revolution.” Dr. Gary North explains the smug contempt of the ruling class for what Codevilla calls the "country class" as arising from the Progressive Era: "(p)rogressivism is a bipartisan monster… As the 19th century ended, the educated class’s religious fervor turned to social reform: they were sure that because man is a mere part of evolutionary nature, man could be improved, and that they, the most highly evolved of all, were the improvers… Thus began the Progressive Era. When Woodrow Wilson in 1914 was asked u2018can’t you let anything alone?' he answered with, u2018I let everything alone that you can show me is not itself moving in the wrong direction, but I am not going to let those things alone that I see are going down-hill.'" If Puritanism, paraphrasing Mencken, is the sneaking suspicion that someone, somewhere, is having a good time, Progressivism is surely the suspicion that someone, somewhere, is having a good time at some State-unapproved activity.

Still, when examining the Progressive Era, one wonders how the ruling class came to have such a death-grip on the populace at large. Progressive-era "innovations" like the Federal Reserve (1913), the Income Tax (ditto), the War emergency act that permitted Roosevelt's 1933 seizure of gold (1917), the FBI/Hoover (1917), and other depredations have helped cement that hold, but could at some point have been repealed by the people. Ah, but how to limit the power of the people? How to decrease the ability of a person to run for Congress without raising a large sum of money? How to dilute concentrations of libertarians and progressives in seas of moderates so as to remove their voices from the national legislature?

Jeff Jacoby notes: "By 1910, the United States had 92 million citizens. In 1911, President Taft signed a bill expanding the House to 435. The ratio of congressmen to citizens now stood at 1 to 200,000." The size has been fixed at 435 since. Take a look at the following table:

Table of Population and Representation

Country

Population

Members of Lower House

Population/Member

Australia

21,262,641

150

141,750

Brazil

198,739,269

513

387,500

Canada

33,487,208

308

109,000

China

1,338,612,968

2979

450,000

Cuba

11,451,652

614

18,650

France

64,057,792

577

111,000

Germany

82,329,758

622

132,500

India

1,166,079,217

530

2,200,000

Iran

66,429,284

290

229,000

Israel

7,233,701

120

60,500

Italy

58,126,212

630

92,000

Mexico

111,211,789

500

222,500

Netherlands

16,715,999

150

111,500

New Zealand

4,213,418

120

35,000

Russia

140,041,247

450

89,000

Spain

40,525,002

350

116,000

Sweden

9,059,651

349

26,000

Switzerland

7,604,467

200

38,000

United Kingdom

61,113,205

650

94,000

United States

307,212,123

435

706,000

Western developed Democracies average, including Israel, excluding US

~ ~

89,000

Can one spot any outliers? First, recall Hermann Goering's quote: "Of course the people do not want war. But after all, it is the leaders of the country who determine the policy, and it is always a simple matter to drag the people along whether it is a democracy, a fascist dictatorship, or dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism." Is this correct?

Of the Western democracies or democratic republics listed above, the UK, US, Canada, Australia, New Zealand, France, and the Netherlands all took part in the killing-fest that was World War Two. The others on the list were not "democratic" at the time, except for Switzerland and Sweden. New Zealand entered the war on Britain's side out of loyalty to the "mother country," but neither Switzerland nor Sweden had been colonized in many years; their neutrality was preserved, but the two countries also average the lowest numbers of people per representative between them. Both have likewise maintained neutrality while remaining prepared to defend themselves.

At the opposite extreme from these highly representative countries, we find India, China, and the United States. China is hardly a conventional "democracy," but one can be assured that there are fewer constituents per person than India. India maintains a highly Federal system, however, with much power remaining with individual states and so the concentration of population has less effect at the Federal State level. The US once had a highly Federal system, like India, but has become less so.

That fact can be blamed on the US Civil War, or the 17th Amendment, or the aftermath of World War Two, but the answer is a combination of many of these, and others. Salient also is this fact: in 1790, with a population of 3,929,000 and 105 Representatives, the US had representation in Congress at 37,500 people per Representative. Maintaining this ratio today would require 8200 Representatives, a mind-bogglingly large number for any poor lobbyist to even consider buying control of. It would also make it easier for non-Republicrat parties to get a foothold in Congress, where non-major parties have dwindled with declining representativeness. Finally, the spectacle of 8200 self-important people vying with each other for attention would make obvious the ridiculousness of trying to govern a State grown hypertrophic, and lend major support to a collapse back to a more manageable governmental unit.

Thomas M. Schmidt [send him mail], a native of Brooklyn, thinks the libertarian “reduction ad absurdam” here engenders thoughts of anarchy in the reader.

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I bought the book for my friend to read, and he likewise gave me a book dealing with dismissing the controversy (I did point out that "my" book was based on previously unavailable classified documents). I did not think his book made his point well, but he did have a logical point that undermined Stinnett’s and thus my argument. According to article 3 of the Tripartite Pact among Italy, Germany, and Japan, "Japan, Germany, and Italy … undertake to assist one another with all political, economic and military means if one of the Contracting Powers is attacked by a Power at present not involved in the European War or in the Japanese-Chinese conflict." So it was logically impossible for Roosevelt to assume that inciting the Japanese to strike the first blow would bring him into the war against a Nazi Germany which had been extremely cautious (unlike the Wilhelmine Second Reich) in actions to not provoke the US to war. Of course, Hitler did declare war on the USA in the wake of Pearl Harbor, an action called "Hitler’s greatest blunder" by a number of sources; in the linked article, Nicholas Henderson does cite some support in the record for Nazi Germany’s declaration, but no necessity.

Intentionally taking no action to prevent the disaster at Pearl Harbor would be not merely Machiavellian statecraft of a most extreme order, it would be a crime. In order for a crime to be proven, means, motive, and opportunity must generally be shown. Roosevelt, with his imperious control of the state and enabling acts of Congress, certainly had the means to provoke an attack. He did not have the opportunity, as that would require Japan’s participation; he did spur the attack with the cutoff of oil deliveries to Japan causing them to eye the oil-rich Dutch East Indies, whose seizure could only be prevented by the US Pacific Fleet, conveniently located by Roosevelt’s command in Hawaii. But the motive is the most difficult issue: would Roosevelt want war with Japan even if it did not include Nazi Germany in the bargain?

Roosevelt, like any politician, was interested in remaining in power. He boasted that no one would ever be able to repeal his Social Security program, and under threat of his court-packing plan, the Supreme Court upheld it in Stewart Machine Co. v. Davis. Even so, he faced rising political opposition. In a fascinating article nominally about the election of 2010, we learn about similarities of this election year to 1946. Then, a large Republican majority overturned 16 years of Democratic dominance of Congress; now, an anti-incumbent movement threatens to shear the "two wings of the same bird of prey" that is the military-industrial State.

The reasons for the Republican sweep in 1946 do have bearing on today: "In September 1945, less than a month after the surrender of Japan, (Harry Truman) called for continued price controls, a full-employment bill, a higher minimum wage, a public- and private-housing bill, and only limited cuts in the high wartime tax rates. In December 1945 he called for national health insurance… (A) Democratic president was proposing and a Democratic Congress was considering proposals to substantially increase the size and scope of government beyond previous peacetime limits. The Democratic 79th Congress did not come as close to passing such proposals as the more heavily Democratic 111th Congress has done, but the prospect existed then as it does now that a more heavily Democratic Congress might do so." Whether the anger at government spending has any effect this autumn is up in the air. More interesting is somewhat of a footnote in the article.

Writing about long-pent-up demands for a return to normalcy, the article states: "In Britain, the 1942 Beveridge Report urged creating a welfare state after the war… In the United States, Franklin Roosevelt in his January 1944 State of the Union address echoed the Beveridge Report… (H)e called for u2018steeply graduated taxes, government controls on crop prices and food prices [and] continued controls on wages . . . Government should guarantee everyone a job, an education, and clothing, housing, medical care, and financial security against the risks of old age and sickness.’" Standard New Deal stuff, all. But would FDR be able to do so?

"Roosevelt, who declared after Pearl Harbor that he was no longer Dr. New Deal but was now Dr. Win the War, was clearly contemplating returning to his former role after the war was over. This despite the fact that in his second term the New Deal was proving unpopular. Gallup polls from 1937 to 1940 saw majorities opposing Roosevelt’s never-enacted "Third New Deal" and supporting cuts in government spending, favoring curbs in the power of labor unions, and opposing welfare programs. Majorities said that New Deal programs were deterring businesses from creating jobs. Roosevelt was evidently calculating that government’s success in the war effort would transform public opinion, as it indeed did in Britain." (emphasis added)

War, as Randolph Bourne declared, is ever the health of the state. Roosevelt’s state was looking sickly from 1937 on; indeed, this loss of public support probably caused him to back off the court-packing plan in 1937. He needed a way to revive his flagging popularity and social programs, and he sought it in war. His motive was not the noble sacrifice of Stinnett, or a crusade against Nazi evil: it was the worst sort perquisite-maintaining backroom dealing that he could muster. But it fit perfectly the needs of the political animal, and explains better than anything his desire for war. Like George Washington Plunkitt, he had "seen his opportunities, and he took ‘em."

Thomas M. Schmidt [send him mail], a native of Brooklyn, refuses to refer to the East River Drive in Manhattan by any other name.

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Jane Jacobs, whose 94th birthday would have been celebrated May 4th, was an original thinker and urban theorist. Where Mises’ theory begins with the axiomatic "Man acts," (just try and disprove that without acting!) and elaborates a whole coherent approach to economics from it, Jacobs seems to say "Cities live," and builds theory upon those observations. Her corpus of seven books shows few if any "Austrian" sources in her bibliographies, and yet the conclusions she draws often seem merely a different way of stating the same descriptions as Mises.

Jacobs started her first book, The Death and Life of Great American Cities, by looking at her own neighborhood (Greenwich Village, where Mises worked at NYU at the same time that Jacobs was writing) and describing the interplay on the streets that has become known by her description of the "ballet of Hudson Street." The urban environment stimulated the safe mixing of people of different ages and backgrounds, with commerce in the form of the small business owner providing a key ingredient to overall order; one salient observation is that the diverse sources of diners for both lunch (local workers) and dinner (nearby homeowners) allow a wider range of restaurants to thrive, with both groups benefitting the other even without direct interaction. The result of this interaction is a spontaneous order in the Hayekian sense, something Butler Shaffer would recognize, and Jacobs comes close to using that exact term; it was certainly something organic, although government could play a part in it with police reinforcing the existing order, and it was unplanned.

Her disdain for urban planners arose from a number of sources. For one, she observed the disastrous results of what she called the "sacking of cities" at their hands. Another source was theoretical. In the Rockefeller Foundation report for 1958, she discovered the approach to scientific problems of Dr. Warren Weaver, that there were three different types: problems of simplicity wherein "physical science learned how to analyze two-variable problems," problems of disorganized complexity that involved too many variables to track but could nonetheless be modeled statistically, and problems of organized complexity where the many variables did not act like independent molecules but acted upon and reacted with each other. Urban planners seemed, at best, to treat cities as problems of disorganized complexity, but as agglomerations of rationally acting people, they were problems of organized complexity, and the analytical tools necessary to address those problems did not exist.

The same situation obtains in economics. Keynes’ economic formulation seems at base to be an effort to reduce economics to a problem of simplicity: C+I+G+X—M=GDP. Econometrics improves on this model to treat the field as statistical relationships "believed to hold between the various economic quantities pertaining a particular economic phenomena under study"; in other words, as a problem of disorganized complexity. And yet the fundamental problem is that "man acts," and confounds the actions of urban planners and government bureaucrats: cities and economics must necessarily deal with problems of organized complexity. Praxeology thus appears to be the appropriate tool for studying economics, or cities, treating both as problems of organized complexity.

What Jacobs and Mises have in common is the centrality of Human Action in functioning economies and cities. This is in great contrast to conventional economists who take a "cargo cult" view of economic functioning, presuming the existence of an economy without understanding how it comes about; these are the masters of studying how "widgets" are produced.

For Mises, the entrepreneur is central to economic functioning. As Rockwell writes: "Ludwig von Mises didn’t like references to the u2018miracle’ of the marketplace or the u2018magic’ of production or other terms that suggest that economic systems depend on some force that is beyond human comprehension… u2018What distinguishes the successful entrepreneur and promoter from other people,’ writes Mises, u2018is precisely the fact that he does not let himself be guided by what was and is, but arranges his affairs on the ground of his opinion about the future.’" It is this anticipation of future demand, and the guts to strike out in pursuit of it, that grows the economy.

Jacobs wrote The Economy of Cities (one of the top 100 books of the 20th century) to make this very point, her targets being Adam Smith and David Ricardo with their focus on division of labor as the source of economic well-being. Division of labor only produces the same items more efficiently, but it does not create new items, which is where economic expansion happens. Rather, economic growth is created in import-replacing cities where workers at firms "spin out" and pursue new opportunities. Jacobs’ description of this process taking place in post-war Los Angeles illustrates WHY the post-war era was not a time of return to depression, as functioning urban economies were able to expand by producing more diversified products and creating new ones.

The conditions supporting economic flourishing were thus a topic of investigation for both Mises and Jacobs. As Hoppe wrote: "Mises had recognized… (that) democracy does not work in multi-ethnic societies. It does not create peace but promotes conflict and has potentially genocidal tendencies." Democracy leads to ethnic conflict: "In newly founded Czechoslovakia, for instance, the Germans were systematically mistreated (until they were finally expelled by the millions and butchered by the tens of thousands after World War II) by the majority Czechs." Mises warned of the dangers of requiring ethnic groups to learn in public schools in different languages.

Jacobs saw the same dynamic applying in her adopted land, Canada. Montreal, economic locus of the nation, had been edged aside by Toronto and was fading into insignificance, and an increasingly anglicized Canada was pushing French Quebec into the background. Jacobs saw the need for peaceful separation to the benefit of both parts of the society; her A Question of Separatism used the peaceable separation of Norway and Sweden as a guide for the secession of Quebec. Failure to do so would lead to continued ethnic strife and significant economic underperformance; like Mises, she saw the problem as one of excess centralization and lack of subsidiarity, an issue she was to write about further in her last book, Dark Age Ahead.

Putting too large a territory under one rule means that it is easier to garner "wealth" by political means, rather than economic ones, especially when a central bank was involved. As Mises wrote: "The excellence of the gold standard is to be seen in the fact that it renders the determination of the monetary unit’s purchasing power independent of the policies of governments and political parties. Furthermore, it prevents rulers from eluding the financial and budgetary prerogatives of the representative assemblies. Parliamentary control of finances works only if the government is not in a position to provide for unauthorized expenditures by increasing the circulating amount of fiat money."

Jacobs wrote Systems of Survival to ponder this very case. She originally wanted to focus the book on "traders and raiders," considering the political class to be parasitic on the productive trading class, but eventually decided that every role in society was either one of trading or guarding: her book "explores the morals and values that underpin viable working life. Like the other animals, we find and pick up what we can use, and appropriate territories. But unlike the other animals, we also trade and produce for trade. Because we possess these two radically different ways of dealing with our needs, we also have two radically different systems of morals and values — both systems valid and necessary." Corruption of either role leads to problems in society, and each role in a properly functioning society must have methods to police the other.

She decided that a system of values guided each area:

Guardian Syndrome’s
Moral Precepts
Commerce Syndrome’s
Moral Precepts

• Shun trading
• Exert prowess
• Be obedient and disciplined
• Adhere to tradition
• Respect hierarchy
• Be loyal
• Take vengeance
• Deceive for the sake of the task
• Make rich use of leisure
• Be ostentatious
• Dispense largesse
• Be exclusive
• Show fortitude
• Be fatalistic
• Treasure honor

• Shun force
• Compete
• Be efficient
• Be open to inventiveness and novelty
• Use initiative and enterprise
• Come to voluntary agreements
• Respect contracts
• Dissent for the sake of the task
• Be industrious
• Be thrifty
• Invest for productive purposes
• Collaborate easily with strangers and aliens
• Promote comfort and convenience
• Be optimistic
• Be honest

Libertarian theory, following Mises, likewise recognized a need for a guardian role, albeit segregated from the state. Perhaps the best proposal was Rothbard’s use of insurance companies to supply the needs of guardianship in society.

It is, after all, society that supports the wellbeing of all. Mises saw economic law as an outgrowth of natural law: he "proved that it was quite possible to insist that economic laws did exist and did place constraints on what was possible in the economic sphere without also endorsing any nonsense about mathematical precision or purely u2018economic’ motives exhausting man’s reasons for acting." This natural law governed the functioning of society as a whole, and economic systems that struggled against economic law were fated to be less competitive.

Jacobs adopts a similar viewpoint in The Nature of Economies. She uses the natural web as a metaphor for a functioning economy; she insists that an economy is an expression in human action of evolutionary pressures. She contrasts the sterile environments of deserts and monocultures (like all those fields growing corn for high fructose corn syrup) with the thriving environment of the rainforest where the same input solar energy is used many times by the incredible diversity of species. A functioning urban economy, like late-19th-century Chicago or present-day Hong Kong, will focus on many tasks and be more resilient to (economic) climate change than the Ricardian "comparatively advantaged" one. Indeed, this point is echoed in Mauboussin’s More Than You Know; fitness landscapes provide that the optimal strategy for a company or an economy is fundamentally unknowable, so the most economically robust course is to have many avenues of pursuit. (A point also brought up by Nicholas Nassim Taleb in the paperback version of The Black Swan.)

It is observations like Jacobs’ that have gained her increasing respect as an economic analyst, just as Keynes has faded in comparison to Mises. Paul Romer has begun to examine how economic growth actually happens, and he is finding that charter cities are essential to creating functioning economies, as Hong Kong, under British law, created the economic colossus that is modern China’s economy. That the recognition of these two giants of economic thought has come after their deaths is saddening, but points again to the fundamental truth that Mises and Jacobs both pursued.

Thomas M. Schmidt [send him mail], a native of Brooklyn, took a Jane’s Walk through Brooklyn on May 1st, and encourages all readers to find a walk near them this Jane’s Walk weekend

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When I returned in 2009, I saw Chicago anew with different eyes. I looked on the city where Jane Jacobs showed me South Lawndale and Back of the Yards as functioning urban neighborhoods turning proles into burghers. It was a city whose poet laureate I could no longer take seriously for his hagiography of a monster, albeit one not of the city. Rockwell had emphasized how its trading and middlemen helped bring peace. In the intervening time, natives of that place, no less fiercely proud of it than any New Netherlander of his home, taught me of its architecture, tribalism, and unbridled capitalistic spirit. The city’s chefs, meanwhile, had embraced a new creativity, and created a food mecca to almost match New York and The City. Finally, a long curse on the city’s baseball teams had lifted in 2005 with the victory of my in-town-favorite White Sox, although the Cubs fans, winless since 1908, did have the best perspective on things: "Hey, any team can have a bad century."

On Wednesday, October 14th, I set out to explore the city. The first stop was at the Michigan Avenue bridge to view the Fort Dearborn Massacre monument. While somewhat incorrect today in displaying Indians as aggressors instead of the genocide victims at the hands of US army that they often were, it does capture the spirit of the city in the late 1890s and is refreshingly figural to the modern eye. It is also a reminder in stone of the duplicitous government policies in wartime that lead to civilian suffering. Like Willem Kieft, a war caused Indian reprisals that primarily affected the people on the frontier. Many of the Indians later left the area as a result of the Treaty of Chicago, negotiated in 1833, very close to the founding of the city.

The area across the Michigan Avenue bridge, north of the Chicago River, is part of the smallest "side" of town, the East Side. I had a chance to walk through the Gold Coast, a district largely bedecked with mansions in the period around 1890, when the fashionable Prairie Avenue district on the South Side was upstaged, and the city’s posh district moved to the North Side.

Ransom Cable House, 1886; source: http://wikimapia.org/14776917/Cable-House-Driehaus-Capital-Management-LLC

A stop into a local Whole Foods showed that Chicago’s power as a shipper remained: my favorite cheese, from California, was for sale here for less than I had ever paid on either coast. Like a wire strung between posts would dip due to gravity, the low point of the arc of cost seemed to hit in Chicago, the "Nation’s Freight Handler." Well-stocked with victuals, I wandered a bit around the area, making sure Ed Debevic’s was still there in 50s throwback fashion, and eventually wended my way onto the platform of the Chicago Avenue station of the circa-1892 elevated system.

I had intended to retrace a historic route to Jackson Park, site of the 1893 World Columbian Exposition, and one part of a glorious chain of parks built from 1870 to 1890 that ring the core of the city. First, however, came a driving need (Unprecedented, I know.) to investigate the new route to Midway Airport, the Orange Line. (Since my last visit, Chicago had taken the depressing tack of abandoning heroic designations for rapid transit lines like "Lake-Dan Ryan" and "Evanston Express" for a series of color-coded names [what subway surfing young man would ride the Pink Line?], possible because of the low number of lines in comparison to a REAL system, but lacking soul or the ability to confuse non-natives.) My Brown Line train took me to the Loop, where I changed to a train linked to the South Side elevated system; such a journey was not possible in the 80s, when only the subway connected North and South.

The ride to Midway is mostly uninteresting, with some long stretches and good views of the route of the Illinois and Michigan canal, the privately constructed transport link that helped make Chicago a transportation center. A return to Roosevelt Road gave the chance to explore again the South Side El, whose breakneck speed on the arrow-straight run to 35th Street I recalled as the best transit ride in America. I could no longer ride to University Avenue to get off and walk five blocks north to view the Robie House, preserved specimen of Frank Lloyd Wright from 1908, as transit follows the age-old rule of government: the private sector builds, the public sector destroys. (This was also the only time I had ever been frightened for my safety in urban America; the South Side sure can seem the "baddest part of town.") The desolation of many blocks along the route of the El was countered by some fine examples of limestone-front Beaux-Arts-era mansions withstanding the urban decay on what appeared to be Indiana Avenue. Most interesting to me was the renaissance on the southern end of the loop that was visible from the El; having seen the abandonment there in the 80s, I was pleasantly surprised to see recovery.

The Green Line train from which I viewed it took me out to Oak Park to view Wright’s 1909 Unity Temple. As the history of it says: "It … broke nearly every existing rule and convention for American and European religious architecture while laying the groundwork for modern buildings… Along with a revolutionary cubist design — with no steeple and no front entrance — Wright’s Unity Temple would use concrete in a daring way." It cured me of any further interest in Wright, who had nearly gotten me killed, as I now saw him as being born too late to serve his true patron, Walter Ulbricht of East Germany. Wright was a man of the 20th century. As in his structural insufficiency at Bear Run, his questionable use of cinders in the concrete at Unity Temple has caused a grave threat to the building; they could use your help. Preserving these 20th-century monuments to the cult of personality is urgent for the libertarian future!

After two days dedicated to my business purposes in Chicago (which included a chance to view the skyline the way any skyline should be viewed, from the water), I was again set loose in the Urbs in Horto. A walk through Grant Park, another legacy of the Gilded Age, gave a chance to explore Millennium Park. It was pleasant, and had incorporated Jacobs’ ideas on avoiding the vacuum that a park causes by including commercial activity, but a rainy autumn afternoon was not the best time to see it. A quick dash across Michigan Avenue allowed access to an Irish-themed gastropub (Stop your snickering and your "jumbo shrimp" gibes! Yes, they did have potato soup, and it was excellent! As was everything!) to renew and refresh.

My last stop exploring was the Chicago Cultural Center. This building was completed in 1896 as the Chicago Public Library. It is stunning, awe-inspiring, shimmering, sumptuous: words do it little justice. Carrara marble, Tiffany Glass, painstaking mosaics, words redolent of long-ago art history classes are brought vividly to life.

Like any proper New Yorker, I was struck with a sense of envy. Oh, sure, this town had never had Dvorak apply its characteristics to a whole hemisphere, or seen Mahler tap the baton at its Symphony Orchestra, or had Stella incorporate its skyline as the centerpiece of a modernist altarpiece. But it had jewels even greater than those in the crown of New York, acquired in a span barely one sixth that of its elder; the kid had style and class.

It is a place of miracles. I was standing in a glorious temple to the accumulated learning of the ages where only mud had been 60 years prior. Ex nihilo, this plucky burg had erected almost all that I have described in the 25 years following its devastating fire. No Federal Ozymandias had commanded it; no state legislature had mulcted the wealth of millions to build it; no bureaucratic pasha had decreed it. Preserved in the city’s heart is late-19th-century testimony to the power of spontaneous order to create wealth and objects of beauty when unconstrained by centralized monstrosities. It speaks of the power of free men working with an honest unit of account, the gold dollar, and free to associate and create with whomever they choose. It offers a glimpse of the promise of a society that can build works of enduring richness again, after Leviathan has collapsed. Go.

Thomas M. Schmidt [send him mail], a native of Brooklyn, knows "the future’s uncertain and the end is always near," and that New York will need Chicago as it struggles with and overcomes DC.

The Miracle of Chicago by Thomas Schmidt is licensed under a Creative Commons Attribution 3.0 United States License.

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As a lawyer, the first in the Dutch-settled area, he was accorded a high position and permitted to travel extensively and to negotiate with the local tribes, Mohawks and Mahicans. From him, in his book A Description of New Netherland (The Iroquoians and Their World) we have an unvarnished look at the relationships of early settlers and Indian tribes, neither the Romanticism of the noble savage of Rousseau or Karl Mey, nor the brutality of some of the contemporaries of van der Donck who preferred to see the natives as savages worthy only of murdering. Van der Donck’s friendship with the natives and exploration of the lands nearby convinced him of the need to publicize and settle this New World, and the need to restrain the dictatorial nature of its rulers.

For the "colony" in which van der Donck lived and worked was not founded by a country, but a company, the Dutch West India company. Their representatives established it as a trading post, to bring beaver pelts back to Europe (the beaver is to this day on the seal of the city of New York). Indeed, by the 1650s, New Amsterdam had become the central hub of trade along the eastern seaboard, a critical link between the tobacco growers of Virginia and their best market in the Netherlands. However, the colony was ruled arbitrarily by corporate officials with little regard for the settlers within their boundaries.

One of these officials, Willem Kieft, determined to launch a war of extermination against local Indians. Despite opposition from many of the settlers, he sent a party to Pavonia and there murdered about 100 men, women, and children. The Indians, thinking at first that they were under attack by other Indians, fled to New Netherland to seek refuge in the fort, and were shocked to find that their treaty partners were the source of their misery. Kieft’s actions launched a war that destroyed much of the work of the Dutch settlers to that time, with outlying farmsteads lain waste. Kieft himself refused to lead the raiding and warring parties, adding to the dismay of colonists.

Van der Donck, like others in the colony, was shocked and sought to have Kieft removed. Ever a wily politician, he ghost-wrote several letters to the Dutch Estates-General and West India Company, to which the names of others in the colony were signed. Kieft might have had to answer charges for his actions had he not drowned when the ship carrying him back to Amsterdam wrecked in the Bristol Channel.

Kieft was replaced, eventually, by Pieter Stuyvesant who had fought against Spain in the Caribbean. Stuyvesant took a liking to van der Donck initially for his knowledge of and negotiating abilities with the Indians. For services rendered to the colony, Stuyvesant eventually granted van der Donck land to the north of Manhattan Island on the mainland. Van der Donck was now a landowner, a Jonker, and he set about establishing a saw mill and the beginnings of a settlement that was "de Jonker’s," which became the modern city of Yonkers in New York.

But van der Donck continued to see the possibility in the colony, and recognized that without fair rules for the treatment of all that settlement and success were jeopardized. He agitated against Stuyvesant as he had against Kieft, only this time directly. He sought to establish a representative body to allow the settlers their own rules, and to enshrine certain legal rights as he had learned at the foot of Grotius. For his troubles, he won an appointment at the Estates General to make his case, that the Dutch government should take over the colony and establish therein the tolerance, openness to trade, and honest legal system that prevailed in the Netherlands.

Through skilful politicking, he won his case utterly: the Dutch government agreed to his plan to make the colony a province, and to recall the military man Stuyvesant as governor. Just before he was set to sail as the head of a group to take control of the colony, however, the Anglo-Dutch war broke out; with changed conditions, undermining the military governor of the city was no longer a wise idea, and van der Donck was placed under a sort of house arrest, forbidden to leave the Netherlands and return to his adopted homeland (indeed, he was one of the first to use the term American to refer to the residents there).

He was finally permitted to return, on the condition that he have nothing to do with the governance of the place, and that he submit to the rule of Stuyvesant. He agreed to these terms, and set about "cultivating his own garden." In 1655, Stuyvesant launched an invasion of the colony of New Sweden, near modern-day Delaware, and conquered it. He did not understand Indians and loyalty the way van der Donck did; the local Indians took it upon themselves to wage a war against the Dutch on behalf of their allies, the Swedes.

A raiding party of these "foreign" Indians, not knowing van der Donck or speaking a language he understood, murdered him at his homestead in the fall of 1655. Stuyvesant had inadvertently caused the death of his former confidant and nemesis. Childless, van der Donck’s widow sold the land, and he disappeared completely.

In 1664, Stuyvesant had the chance to play the opposite role from his drama in New Sweden. The West India Company had failed to supply enough soldiers to defend New Netherland; Stuyvesant had not enough gunpowder in his fort to fire his cannons at the ships commanded by the man who was to become Governor Nicolls, the first English governor of New York. Stuyvesant nonetheless sought to fight, despite the opposition of the vast majority of the colonists; he was only persuaded to surrender on promise of respect for the traditions of the local colony, with only a change in ownership.

And here Stuyvesant played his hand admirably, or rather the hand once proposed by van der Donck. His negotiators with the British arranged for representative local government; in contrast to the intolerant Puritan New Englanders who would later rain their fury upon the South in the Civil War, he demanded freedom of conscience for worship; he negotiated that the colony should be able to freely trade with both Amsterdam and London, making New York the hub of trade with the great but declining Dutch Empire and the rising English one.

Nicolls accepted these demands; the openness to trade and outsiders, the respect for conscience, and the centrality of the harbor at the gateway to the continent made New York the economic dynamo of what was to become the United States. Dutch/Roman law merged here somewhat with English law, and Dutch suspicion of centralization would lead New York to cautiously accept the new Constitution, while leaving itself an escape route. Through New York, van der Donck’s ideas would greatly influence the spirit of liberty present at the founding of the United States; van der Donck would live to see none of it, nor even merit much mention.

It is these thoughts that echo when reading Dr. Gary North’s recent article, When Death Precedes the Applause. As he wrote: "(o)ne of the most important documents in the history of Western civilization was Justinian’s Code. The Emperor Justinian in the early sixth century A.D. had his bureaucrats and lawyers compile the code of Roman law. This was the Corpus Juris Civilis. It became the foundation on Medieval civil law and church or canon law. [and, of course, Dutch law]." This corpus of law was inaccessible to English speakers until one man took it upon himself to translate it. "In 1920, an immigrant lawyer from Germany named Blume was living in Wyoming. He began his translation of the Code. That task took him the rest of his life: half a century. In the meantime, he served on the Wyoming State Supreme Court. He died in 1971 at the age of 96… he labored on a project that only one man had ever attempted, and that man had failed. There was no audience for the set, assuming that he ever completed the task. No university press was likely to publish it: no market." 39 years later, you can view his work here.

As North wrote, neither Mises nor Rothbard lived long enough to see the ultimate acceptance of their visions. Most importantly, however, they remained true to their ideas and wrote in the hopes that the eddies they introduced into the stream of ideas might someday become mighty torrents, just as van der Donck’s written pleadings wound up undergirding many of the freedoms we have come to hold dear in the United States. A little known translator by the name of Charles Gehring would spend most of his life translating the records of New Netherland in the New York State library, an effort that might have remained mostly obscure but for Russell Shorto; his Island at the Center of the World would bring van der Donck and all the long-dead Dutch vividly to the present day, and supply the background material for this article.

So when someone complains that actions, not writing, are necessary to change the world, recall Mises; recall Rothbard; recall van der Donck. You might never see the results, but ideas honestly expounded and forthrightly set down can change the world for the better.

Thomas M. Schmidt [send him mail], a native of Brooklyn, lives on van der Donck’s former estate, and will honor his memory for the rest of his life.

Why We Write by Thomas Schmidt is licensed under a Creative Commons Attribution 3.0 United States License.

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We discussed other locales that avoid taxing the income of foreign residents; as I suggested earlier, places like Dubai might use the lack of personal income taxation to siphon off the most productive citizens from the West, leading to the collapse of the welfare/warfare state without these "Islamists" firing a shot. I learned of a few places I did not know of before, and suggested to him a "country" that also offers income free from taxation.

That "country" is the Roth IRA, which allows a US citizen to put aside money on which he has already paid income tax into an account where all accumulations on the principal are tax free, if withdrawn under certain conditions. Fairmark explains: "when you take money out of a Roth IRA, the first dollars you take out are considered to be a return of your regular contributions. You don’t have to meet any special tests to receive those dollars free of tax. You can take them out any time, for any reason, without paying tax or penalties." To get the earnings out without paying taxes, you must meet two tests: withdrawals must come at least five years after you opened the account, and must be one of the four "qualified" distributions. They are "(d)istributions made on or after the date you reach age 59; (d)istributions made to your beneficiary after your death; (i)f you become disabled, distributions attributable to your disability; u2018(q)ualified first-time homebuyer distributions.’" (As always, check with your attorney for current tax law.)

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So it would seem easy to live the good life: just buy that winning lottery ticket in a Roth IRA and collect your millions tax-free. Unfortunately, conventional IRAs are restricted, usually, to stocks and bonds; self-directed IRAs allow for a wider range of investments, but not lottery tickets or, among others, "investments … includ(ing) artwork, rugs, antiques metals, gems, stamps, coins, alcoholic beverages and other collectibles." However, according to IRAMyWay, things like "Residential Real Estate, Commercial Real Estate, Raw Land, Trust Deeds / Mortgages, and Mortgage Pools, Private Notes and Loans, Private Stock Offerings, Limited Liability Companies (LLC), Limited Partnerships (LPs), Tax Certificates, … and Commercial Paper" can all be held in a self-directed (Roth) IRA.

Imagine two friends, Fred and Joe, each age 60 with a Roth IRA that had been opened ten years previously, with a balance of $200,000. Fred’s self-directed IRA could write a mortgage on Joe’s house, while Joe could write a mortgage on Fred’s house; at 10% interest, each IRA would earn $20,000 in interest annually. The interest, earnings, could be paid out tax free to each man; at the same time, each might deduct (check with your tax advisor!) the $20,000 he paid in interest from his Federal taxes, creating $20,000 in tax-free income. More creative scenarios are left to the reader as an exercise; suffice it to say that the combination of qualified Roth distributions and self-directed investments could easily lead to a situation where the Federal state legally saw many of its citizens avoid taxes entirely.

There are limits; as SmartMoney outlines, "(e)xamples of what the IRS (or the Department of Labor) may consider to be prohibited transactions include the following: (h)aving your IRA buy stock or other assets from you or sell them to you; (h)aving your IRA lease assets from you or to you; (h)aving your IRA buy stock in a corporation in which you have a controlling interest; (h)aving your IRA lend to you or borrow from you; (h)aving your IRA engage in transactions with certain related parties and/or family members." (Some examples of related parties and family members are given here.) Even so, mutually-beneficial friends could take advantage, as well as cousins, uncles/aunts to nieces/nephews, etc. Using the Federal Gift Tax exclusion, a great aunt or uncle could provide the benefits of some tax-free income to a young person otherwise unable to take money out of a Roth IRA directly, or by leaving a qualified Roth to a younger person upon death.

This situation is treacherous for the Federal Government. As Gary North outlined, 2010 is the year that Social Security will take in less net revenue to the government in FICA "taxes" than is paid out in benefits. North proposes a few solutions: "(l)et’s see if Congress will kick the can some more. Let’s see if Congress passes hikes in the FICA tax rates in 2010, or extends the wage base that pays the tax beyond today’s $106,800 limit. My guess: Congress will kick the can. The deficit will grow."

What is certain is that out-of-control spending will continue, and meaningful benefits for those on Social Security will have to be funded from somewhere. My guess for the most likely future source is a wealth tax on the retirement accounts of those who have distrusted the word of the Federal Government to pay benefits, but who have curiously trusted that same government with regard to retirement account security. Remember that Social Security benefits themselves were once tax-free. The promise of tax-free earnings from a Roth IRA must likewise be reneged upon if the Federal State survives.

Thomas M. Schmidt [send him mail], a native of Brooklyn, is not a tax advisor and has not offered any tax advice in this article, but enjoys observing the schizophrenic effects of Federal tax policy.

The Roth IRA Must Die! by Thomas Schmidt is licensed under a Creative Commons Attribution 3.0 United States License.

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India in 1857 saw the Sepoy Rebellion, a revolt with a number of causes. One contributing factor was the "doctrine of lapse," under which the smaller vassal states of a divided India would fall to British control in the case of an incompetent leader, or the lack of a male heir. Rani Lakshmibai, defrauded of her Raj by this doctrine, would be one of the leaders of the rebellion, which failed. As a result, the last Mogul emperor of India was deposed (some 150 years after the last "great" one died), and the British took up much more centralized control of the Subcontinent.

The following years saw any number of consolidations, especially in central Europe, where Napoleon, in Paul Johnson’s words, had glorified "the deification of force and war, the all-powerful centralized state, the use of cultural propaganda…, (and) the marshaling of entire peoples in the pursuit of personal and ideological power," while founding the Cisalpine Republic in Italy and the Confederation of the Rhine in Germany (ending the decentralized Holy Roman Empire in the process). The collapse of these Jacobin monstrosities did not last. The house of Savoy in 1859 warred on Austria, with the assistance of France; France gained Savoy and Nice, Savoy gained Lombardy and most of the Italian Peninsula excepting only Venice and the rump of the Papal States, and Victor Emmanuel became the king of Italy. The 7 Weeks War in 1866 cost principle-of-subsidiarity-observing Austria the land around Venice and much of the control it had exercised in Germany, with the north German Confederation under Prussian control assuming power; 1870′s Franco-Prussian war cost the pope his French defenders, leading to the incorporation of the Papal States into consolidated Italy, while the independent nations of south Germany, along with Alsace and Lorraine, fell under the suzerainty of Berlin. Thus, in 11 years the toxic poison worked by Napoleon took effect, and largely decentralized polities consolidated, a distant after-effect of his invasions earlier in the century. Other attempts at consolidation must include the Polish rebellion of 1863, which promised to centralize control of all property in the state, but which failed in 1865.

Back in the Western Hemisphere, the US saw over 600,000 killed as the Confederate states attempted to secede, an attempt at radical decentralization. Direct effects of the war were the first Federal income tax, the creation of a fiat currency allowing uncontrolled spending, and the destruction of a decentralized republic symbolized in the grammatical shift from "these United States" to "the United States," now a singular noun. Meanwhile, to the north, the largely independently-acting Canadian provinces confederated in 1867, though as Wikipedia notes it is a "federal state and not a confederate association of sovereign states which is usually what Confederation means."

Finally, Asia saw two revolutions that would reverberate into the 20th century. The Taiping Rebellion saw a temporary government that foreshadowed Mao. Before it was suppressed, ending in 1864, "(p)rivate property ownership was abolished and all land was held and distributed by the state" and "(t)he society was declared classless." More successful was the Meiji Restoration in Japan, which ended the relatively decentralized Tokugawa Shogunate, with control passing to the government around the Emperor, cemented in 1867.

All of this centralization increased the number of bureaucrats required by the hegemonic powers. A state requires more resources to rule a larger area than a smaller one. The increased resource requirement in most cases came from the consolidated territories, but these were largely one-off gains. Agricultural, feudal Prussia now had access to the import-replacing cities of western and southern Germany, but would soon begin to siphon capital to the needs of a central State, leading literally to their utter destruction some 75 years after the consolidation. Control of all of Italy led to a deterioration of economic and social conditions in the south; some 16 million Italians emigrated between unification and World War 1, with the changes forced on the south by centralization looming large.

Examples from the other countries already mentioned would also reflect the growth of the state, but each state followed the pattern set by the Roman empire, where acquisition of new territories was initially a profit-making enterprise for the state. However, the increased burdens of what is fundamentally an uneconomic enterprise, the state, always threaten to weigh down and collapse a complex society. Tainter’s book on the subject described the collapse of Rome beginning when the marginal costs of empire exceeded the profits from expansion. In this regard, the most important event of the Age of Centralization was the drilling, 150 years ago today, of Colonel Drake’s oil well in Titusville, Pennsylvania, on August 27th.

Oil is fantastic stuff. As OPEC reminds us:

"(C)rude oil itself is of limited use. To extract the maximum value from crude, it first needs to be refined into petroleum products. The best-known of these is gasoline, or petrol. However, there are many other products that can be obtained when a barrel of crude oil is refined. These include liquefied petroleum gas (LPG), naphtha, kerosene, gasoil and fuel oil. Other useful products which are not fuels can also be manufactured by refining crude oil, such as lubricants and asphalt (used in paving roads). A range of sub-items like perfumes and insecticides are also ultimately derived from crude oil… Furthermore, several of the products listed above which are derived from crude oil, such as naphtha, gasoil, LPG and ethane, can themselves be used as inputs or feedstocks in the production of petrochemicals. There are more than 4,000 different petrochemical products" (emphasis added)

The greatest product of oil, however, is wealth. As J. Paul Getty advised: "Formula for success: rise early, work hard, strike oil." This wealth is due to the phenomenal returns from oil, known as EROEI, energy return on energy invested. Unlike coal, which had to be physically lifted from the ground, oil often flowed to the surface under pressure. Returns of over 100 times the energy invested to drill a well were not uncommon in the early days of oil exploration.

It is this bonanza of essentially unearned natural wealth that has formed the basis of much of the 20th-century improvement in human living conditions. Cheap oil forms the basis of the current US food production chain and any number of other systems: "Crude oil has been critical for economic development and the smooth functioning of almost every aspect of society. Agriculture and food production is heavily dependent on oil for fuel and fertilisers. In the US, for instance, it takes the direct and indirect use of about six barrels of oil to raise one beef steer. It is the basis of most transport systems. Oil is also crucial to the drugs and chemicals industries and is a strategic asset for the military." (emphasis added)

Here, then, we can find the economic support for the excess of centralization that must otherwise collapse the societies that it plagues: the extraordinary profits from oil have paid for the hypertrophic governments that afflict us. All of the uneconomic activities of the US Federal Government and its economic distortions could be borne as the wealth increased. Indeed, governments know that their uneconomic behavior needs SOME external input to support the system, and the militaries of many nations have launched invasions seeking control of oil, including Imperial Japan and Nazi Germany; oil lifting costs of $1.50 a barrel in Iraq certainly did not deter the US invasion in 2003, an invasion originally to be paid for from Iraqi oil revenues.

The bonanza from oil, however, is at an end. Sometime between 2005 and 2008 the world produced more oil in one day than ever before, which total was not matched afterwards; this is the concept of peak oil. The oil that remains is less easily produced, and the EROEI is much lower; thus, the subsidy to uneconomic ways of living must be reduced. This is particularly threatening to the Federal Government, which thrashes about, attempting to continue the status quo. It will likely seize larger quantities of wealth from an economy in shock from declining energy inputs, faster collapsing the ability of the economy to support it. As Herbert Stein said, "Things that cannot go on, don’t." The era of centralization is fast ending.

Ironically, the same Federal Government whose Internet helped to undermine its control over information and information providers is making another blunder in this area. The Amish, famously exempt from Social Security, function in an economy largely independent of the oil-powered world, and pay lower net taxes as a result of it; sunshine, after all, is "free," and the shared labor in a barn raising has no part diverted to outsiders through taxation.

Most Americans, however, would prefer to maintain modern lifestyles, especially including electricity. Fortunately, the increasing efficiency of the market in creating more efficient distributed generation of energy production from sunlight, and the incentives for green energy pushed by the Obama administration (and the bailouts) will have the side effect of largely decentralizing energy production; lacking direct property taxes, there is no way for the Federal Government to tax the "income" produced by reduced or eliminated electric bills. Moreover, a distributed generation system is far less vulnerable to attack than the centralized behemoths of yesteryear, so easily targeted in Iraq and other locales. At the margin, these changes will shift power to localities, and further undermine Leviathan.

Special thanks to "wonderful old curmudgeon" Jeff Zervas for feedback and editing.

Thomas M. Schmidt [send him mail], a native of Brooklyn, knows from university studies that Phoenix is not the only place that has desired to be a place in the sun, and he welcomes the coming victory of the sun-dwelling Eloi over the Morlocks.

The Age of Centralization by Thomas Schmidt is licensed under a Creative Commons Attribution 3.0 United States License.

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Gary North has noted the irony concerning this network: "The national State in wartime seeks to control civilian access to the battlefield. Reporters are in various ways restricted geographically. Their access to communications media is also restricted… This requires control over the flow of information… (T)he cost of restricting access to unauthorized battlefield facts … has risen inexorably for the State. The decentralization of the information-delivery system is the central fact of our era… The spontaneous order of the free market inevitably trumps the plans of government bureaucrats to extend the power of the State. The Web may be the best example of this spontaneous order in human history. It has made nearly impossible the statist gatekeepers’ control over the flow of information. (emphasis in original)" What is "more ironic, the Web is the unplanned child of DARPA, the military’s research agency, which began building the Internet in the late 1960s," so the US Federal Government furnished the tool that has undermined its control of information.

Of course, the Federal Government retains the ability to gum up the works. The classic tale is recounted here. In brief:

Milo (Medin) was running the largest IP net in the federal government… “In 1988, a Finn — call him Lars — hacks his way into Milo’s computers. Ticks Milo off. He does a trace route and finds his way back to the administrator of the domain in Finland. It’s an academic site. Milo already knows Lars’ IP address. You can’t hide from Milo. He says to the administrator, “We have a problem. Please have a conversation with Lars.” That upset the Finns, who say, “We are not going to do that! We respect civil liberties here! You can post a complaint if you like, but we can’t tell the guy what to do.” So Milo goes into a slow boil. Says, “I’ll give you about 30 minutes to get that guy’s files off our machine.” “Nothing happens. So Milo issues an order: “Take down Scandinavia.” The switch is pulled. Three countries go dark. They don’t notice it immediately, but pretty soon e-mail messages are not getting returned. At last, three senior administrators go to Lars, so the story goes, and they say: “We don’t care if you hack into the CIA; we don’t care if you bring down NSA; and we don’t mind if you abscond with all the financial bits in the Federal Reserve. But don’t mess with Milo at NASA.’

Of course, the bigger problem is not mercurial but private-property-protecting network administrators, but the ham-fisted State. Examples abound of restrictions set up by the US Federal Government being undermined by its brainchild. For example, Internet traffic is beginning to bypass the United States and its Patriot-Act intrusions, which constitute a form of "failure" that is to be routed around: "Internet industry executives and government officials have acknowledged that Internet traffic passing through the switching equipment of companies based in the United States has proved a distinct advantage for American intelligence agencies. In December 2005, The New York Times reported that the National Security Agency had established a program with the cooperation of American telecommunications firms that included the interception of foreign Internet communications… Some Internet technologists and privacy advocates say those actions and other government policies may be hastening the shift in Canadian and European traffic away from the United States. u2018Since passage of the Patriot Act, many companies based outside of the United States have been reluctant to store client information in the U.S.,’ said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington. u2018There is an ongoing concern that U.S. intelligence agencies will gather this information without legal process. There is particular sensitivity about access to financial information as well as communications and Internet traffic that goes through U.S. switches.’"

In this regard, the Internet reflects the rule of the market that it emulates. Entrepreneurs seek market niches in providing services to willing customers; many times the subverted obstacles to sales originate with the State. Freedom of association is one troubling area, and Federal civil rights laws have thankfully done away with de jure segregation. Paleoconservatives and libertarians would argue, however, that they now restrict private behavior to a great extent.

Into this breach the market has entered. Two recent stories discuss market-based mechanisms for obtaining a specific clientele. Robert Weissberg points out a few things about your favorite restaurants and clubs that you might have accepted, but failed to ascribe to design: "As government shoves harder and harder to deprive, say, WASPy men from mingling with other WASPy men, below-the-radar but perfectly legal subterfuges evolve." This merely reflects "an often economically driven effort to satisfy a clientele that prefers to mingle with its own. Everything is, moreover, absolutely neutral and totally legal in principle — tactics are about keeping unwanted people, regardless of stripe, away."

How might an establishment do something like this? "Imagine a restaurant anxious to attract middle-class female customers located within walking distance of a housing project populated by poor, hip-hop inclined young men. Though the u2018nice ladies’ will vehemently deny it, they will go elsewhere if forced to mingle with these u2018threatening’ young men. How, then, can the eatery survive without running afoul of discrimination complaints? … First, softly pipe in classical music, preferably of the Baroque style. … It is no accident that successful retail chains obsess over background musical programming while inept rivals often permit staff to select music willy-nilly, a policy that almost always brings trouble given horrific teenager tastes. …

"The menu is also critical. Our devious proprietor will exclude any items known to be favorites among certain lower class types — inexpensive u2018fast food’ fried dishes while pricing everything just a bit beyond what McDonald’s or Burger King offers. And no hamburgers or cheeseburgers, never! Further sprinkle a few intimidating foreign words on the menu — at least five types of quiches. The coup de grce will be offering all sandwiches with u2018gourmet’ five-grain bread, everything topped with alfalfa sprouts and arugula, only using low-sodium, low-fat deli meats, offering soups of the cream of broccoli or lobster bisque variety, plus a mind-boggling selection of exotic herbal teas, among other u2018white’ delicacies. If a potato side-dish is to be offered, make it organic German vinegar/sour cream red potato salad, never French fries."

But is it correct to make these sorts of associations between the clientele sought and products? Credit card companies would seem to agree: "(C)redit-card companies are becoming much more interested in understanding their customers’ lives and psyches, because, the theory goes, knowing what makes cardholders tick will help firms determine who is a good bet… They have sought to draw psychological and behavioral lessons from the enormous amounts of data the credit-card companies collect every day… people who bought cheap, generic automotive oil were much more likely to miss a credit-card payment than someone who got the expensive, name-brand stuff. People who bought carbon-monoxide monitors for their homes or those little felt pads that stop chair legs from scratching the floor almost never missed payments. Anyone who purchased a chrome-skull car accessory or a u2018Mega Thruster Exhaust System’ was pretty likely to miss paying his bill eventually. …(M)easurements were so precise that (they) could tell you the u2018riskiest’ drinking establishment in Canada — Sharx Pool Bar in Montreal, where 47 percent of the patrons who used their Canadian Tire card missed four payments over 12 months. (They) could also tell you the u2018safest’ products — premium birdseed and a device called a u2018snow roof rake’ that homeowners use to remove high-up snowdrifts so they don’t fall on pedestrians."

You might wonder about these associations. "Why did birdseed and snow-rake buyers pay off their debts? The answer, research indicated, was that those consumers felt a sense of responsibility toward the world, manifested in their spending on birds they didn’t own and pedestrians they might not know. Why were felt-pad buyers so upstanding? Because they wanted to protect their belongings, be they hardwood floors or credit scores. Why did chrome-skull owners skip out on their debts? u2018The person who buys a skull for their car, they are like people who go to a bar named Sharx,’ Martin told me. u2018Would you give them a loan?’"

Both stories show the effect of government intrusion on free association of individuals, and how that intrusion has made the situation worse for the very people it was supposed to help. Previously, an arbitrary but explicit standard obstructed the admission of "others," although visitation and membership might be obtained through the guidance and friendship of an insider. Now, subtle psychological techniques and invisible analytical procedures do the excluding, and not one person in one hundred could understand why. Indeed, a paranoid mind might consider the whole effort neo-feudal, with credit scores augmented by searches for the "wrong" behavior keeping the serfs in their place, unable to obtain the loans needed to move to the "better" areas.

There will certainly be an outcry against these market innovations, with an effort to "do something." The simplest path is the Rockwellian one: repeal 64. Before you discount this as impossible, recall the one time that Congress did actually admit error: the repeal of the 55MPH speed limit; it could happen again. Alternately, the market could see the creation of companies dedicated to raising the credit scores (through making the "right" purchases and avoiding the "wrong" ones) of modern-day credit serfs. Most likely, Congress will attempt to outlaw the behavior that results from its outlawing of behavior, and the market will route, again, around legislative failure.

Thomas M. Schmidt [send him mail], a native of Brooklyn, venerates the Naval and Military Club that humiliated him by making him wear a jacket and tie at breakfast, with the request made with firm but subtle British understatement.

The Market as Router, Writ Large by Thomas Schmidt is licensed under a Creative Commons Attribution 3.0 United States License.

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Do you know how delicious Reblochon cheese is? I don’t mean young, firm, white-rinded Reblochon. I mean after it has had time to ripen, and the rind has turned reddish-orange, and when cut the cheese starts to flow out from between the rinds, and the smell — well, the smell gets you your own seat on the train. Lovingly trace your knife through, and spread an unctuous layer on your crust of bread: there may be no better cheese in the world.

Do you know that I might never have found this pleasure if not for you? In the late 1990s, you proposed to ban the sale of raw milk cheese, of which Reblochon is only one outstanding example (you’re still at it, by the way). With the defiant attitude of the native New Yorker, I marched down Third Avenue to Lamazou cheeses, where Nancy and Aziz were extremely helpful in giving me a tour of what might soon be a world closed to me: Morbier, with the trace of smoke in the middle; Appenzeller and Tete de Moine, hard, like the Swiss mountains from which they come; Tomme de Savoie and a whole host of others, all with flavors like those I had never known.

If Reblochon was good, I wondered what it tasted like in its pre-cheese form; yes, raw milk is what I now sought. I recalled seeing certified raw milk in my youth in Greenwich Village health food stores, but could not find any in the late 90s. Seems when I was not paying attention, you took care of that little matter by banning interstate sales of raw milk in 1984. Colleagues from the former Soviet Union extolled the delicious nature of milk fresh from the cow, dismayed that they could not find such in the land of the free.

All this spurred me to locate a source. The Union Square Greenmarket revealed a few suppliers selling their own raw milk cheeses; perhaps they had a pint or two of the real stuff? No, but one supplier, Hawthorne Valley Farm, did sell raw milk at their farmstead, as permitted under New York State law. And so I found myself driving 120 miles north of the city, where unhomogenized raw milk was for sale at the farm; I bought a half-gallon, and took it home to try. Warmed to "cow temperature," it was delightfully sweet and creamy. Why should it be banned?

And here you taught me my first lesson in what used to be called Moral Philosophy, economics. You see, the liquid produce of the cow is generally free of bacteria (one reason for this use among the Masai). However, pasteurized milk was originally developed because bacteria in the milk led to tuberculosis, among other illnesses; nowadays, E. coli might as easily get into the source. How did these bacteria come to be in the milk? From sloppy proprietors who did not take care to exercise precautions like properly cleaning their cows and equipment. Thus all milk had to be pasteurized for safety, driving the careful proprietor into an economically disadvantageous situation relative to the slob, and turning milk into a commodity: Gresham’s law applied, and bad practices drove out good husbandry. The same applies in other areas of cattle ranching.

Do you know how delicious grass-fed beef is? In the early part of this decade, you proposed to ban imports of Argentine beef. My local supermarket sold the stuff, and I figured to buy some before I lacked the chance. What depth of flavor! What exquisite texture! The meat is not marbled with the fat that encumbers and tenderizes American feedlot beef, so it is tougher and juicier, and the fat is healthier, as the cattle have fattened almost entirely on grass. You helped me become a better cook by learning how to tenderize through marinades, a skill that comes in handy now that more expensive cuts of beef are less in reach for us all.

You did eventually ban the importing, but I was able to find American suppliers, including local ones in New York, and a few national suppliers. Happily, these suppliers seem to have grown in number, as their entrepreneurial owners seek to discriminate market segments in the general mass of buyers. Bill Niman proposed to do the same for pigs as the grass-feeders were doing for cattle, and heirloom free-range pork likewise entered my food vocabulary, with a major assist from Joe Sobran.

Sobran’s description of the life of a commodity-pork pig is depressing in its inhumanity. What happens in the slaughterhouse is worse: "’Squealing hogs funnel into an area where they are electrocuted, stabbed in the jugular, then tied, lifted, and carried on a winding journey through the plant. They are dunked in scalding water, their hair is removed, they are run through a fiery furnace (to burn off residual hair), then disemboweled and sliced by an army of young, often immigrant laborers’ who u2018wear earplugs to muffle the screaming.’ Most find the work demoralizing." This is the picture of the modern, post-Upton-Sinclair slaughterhouse you have wrought, the very reason you were brought into being.

I’m reminded of this as I ask you, do you know how delicious Jamon Iberico de Bellota is? The pata negra pigs of southern Spain roam freely through fields and oak forests. When their time is near, they may be served a diet exclusively composed of acorns. The resultant effect is magnificent: the meat has a sweet, sometimes gamy flavor, and the fat, well, "the curing process converts the fat of the ham into a beneficial good-cholesterol fat, much like extra virgin olive oil."

But no slaughterhouse in Spain met your exacting standards, so this fine ham was not sold in the USA. It was in Parma, no slouch in the ham department, that I first tasted this delicacy, and I must thank you: it is the king of hams, and I would never have found it without you. Now, of course, an abattoir that meets your standards has opened in Spain, and Jamon Iberico de Bellota is for sale in the USA, at prices exceeding $100 a pound, and now your friends at the USDA have gone and made it even more expensive. You remind me that the FDA, like all government bureaucracies, is set up to favor the large over the small, the commodity producer over the artisan.

It is not the exquisite foodstuffs that your nannyism has led me to for which I have most to thank you; rather, it is your excellence in teaching moral philosophy. For years I filled my belly with the commodity products that you have brought about through your politically-connected centralization of control over the American food industry. But my mother used to tell me "you are what you eat." And so in eating the undifferentiated food that you foist upon us, I lost more sense of my essential nature and became more of a commodity; your friends in the rest of the government would like that, an enumerated, undifferentiated mass particle for them to push around, wouldn’t they? You have helped me to a visceral understanding of unaccountable hypertrophic government, and this is the most important lesson you took the time to teach me.

You see, the ability to discriminate is the heart of liberty. Charles de Gaulle once asked, "How do you govern a nation that has 246 kinds of cheese?" Since that time, the number has grown to over 500; the microbrew and artisanal cheese industries in the USA, for two examples, have exploded the number of brands and varieties of all kinds of liquid and solid refreshments. A population that can discern differences at a high level (discriminate, that is) cannot be ruled, only led, and this is only one small part of the promise of increased freedom as your centralized control breaks down.

Best,
Tom

Thomas M. Schmidt [send him mail], a native of Brooklyn, knows that the root of the word culture is till, cultivate, or worship, and that freeing oneself from state worship requires freeing agriculture.

Thomas Schmidt Archives

Paris around 1840 was the apogee of the artistic world, drawing to it immigrant painters, sculptors, writers, and musicians, a roiling mass that included poets like Heinrich Heine and composers Giaocchino Rossini and Giacomo Meyerbeer, whose Robert le Diable became a template for French grand opera for the rest of the century. For a young composer on the make, it was the place to prove one’s mettle, and so Richard Wagner attempted from 1839 to 1842.

A provincial German, he brought upon himself many troubles trying to fit into the cosmopolitan Parisian society. He approached and initially received support from Meyerbeer, a wealthy German Jew from Berlin, but, as Joachim Kohler demonstrates, his attempts to extort blackmail from Meyerbeer were not as successful as Heine’s. Lacking funding and unable to sell music sufficient to support his extravagant lifestyle, he took to writing for German newspapers and transcribing music; many of his early writings are collected in Wagner Writes From Paris, which gives an inkling of his future directions.

He did compose one opera in French Grand Opera style, Rienzi, and its premiere in Dresden made his name in that city. The problem with Paris, Wagner decided, was not that HE was wrong, but that the model of drama that they pursued, derived from Roman forms, was inadequate to the task of tragedy. While working as musician for the court chapel in Dresden, he worked out with his artistic circle the ideas that would revolutionize music drama: the foremost among these was an attempt to return to the roots of tragedy, in ancient Greece. The elements of music, painting, dance and poetry were all present then, and he would restore them in proper balance.

Leading a revolution in ideas is perhaps difficult when cosseted in the bosom of the state. Wagner’s friends in Dresden, including the anarcho-communist Bakunin, helped solve that problem for him by instigating the revolt of May, 1849, a revolt in which Wagner himself took a major part. The suppression of the revolt led to Wagner’s fleeing from a death sentence, to take up residence in Zurich, much like another socialist.

On the way to Zurich Wagner stopped in Paris, where he wrote his essay Art and Revolution. Here he was to outline why Greek drama was superior, and why modern (and Parisian) drama had failed to stir the soul: "Modern changes in society have resulted in the catastrophe that art has sold ‘her soul and body to a far worse mistress — Commerce.’ The modern stage offers two irreconcilable genres, split from Wagner’s Greek ideal — the play, which lacks ‘the idealising influence of music’, and opera which is ‘forestalled of the living heart and lofty purpose of actual drama.’" Wagner conceived of his superior dramatic form as the Gesamtkunstwerk, or total art work.

In Zurich Wagner began to compose the poem of the Ring, brilliantly assembling sources from a wide range of sagas, a process outlined in I Saw the World End (tragically incomplete due to the author’s death, it’s the best guide to the poem of the opera). He started with what became the last opera of the Ring Cycle, eventually named Götterdämmerung (Twilight of the Gods), and wound up having to explain so much of that story that he wrote three other operas to precede it, Das Rheingold, Die Walküre, and Siegfried, each providing background to the one that follows, all written in reverse order from the one that they are performed in.

The Ring begins in Das Rheingold as an exposition of the ideals of Young German Wagner, a howl against those who steal gold from nature and use it to base commercial and political ends. That this desire for ill-gotten commercial and political gain is toxic is revealed in the fact that everyone who possesses the Ring forged from the Rheingold dies, facts on display later in Siegfried and Götterdämmerung. The Ring itself, however, is absent from Die Walküre, the music drama in which Wagner most strongly pursued his conception of Greek drama.

At the heart of Greek drama, according to Aristotle, was catharsis, an emotional cleansing. As Wikipedia notes, "Some modern interpreters of [Aristotle] infer that catharsis is pleasurable because audience members felt ekstasis (Greek: ἔκστασις)(ecstasy)… from the fact that there existed those who could suffer a worse fate than them was to them a relief." The bearer of this fate we came to know as the tragic hero, anticipating the central Christian doctrine of the man who takes on the sins of the world and through suffering absolves them.

It is one thing to read and study this concept, however, and another entirely to experience it. The plays of Aeschylus, Euripedes, and Sophocles might have cleansed the psyches of ancient Athenians, but their scenarios seem often too remote to effect the same response in modern audiences. Wagner realized that the elements of music and chorus were missing from these tragedies, and sought to add them back. In this regard, he wrote the poetry, composed the music and specified exacting stage and scenery directions.

On April 12, 1997, these elements were assembled at the Metropolitan Opera house. Wotan, chief Norse god, (sung by James Morris) has had all his plans to recover the Ring thwarted, and all by his own entangling agreements. His beloved hero son, Siegmund, he must sacrifice; his favorite daughter, Brünnhilde (sung by Hildegard Behrens), disobeys him while doing what he wished to do, and he must banish her forever. The second half of Act III consists of her imploring him to protect her; the emotion that is unleashed when he finally relents overwhelmed the New York audience, the cold, hard, cynical, worldly New York audience, who wept as one and stumbled out afterward, blinking into the daylight, transformed, inoculated by catharsis against the worst anguish life could throw at them.

This effect was obtainable only for several reasons. The haunting music, which Wagner said made him ill to write, is a necessary condition, and played at a cadence by James Levine slow enough to allow it to brood but not so slow as to produce melodrama. It is not sufficient, however: also required is a Brünnhilde who can act and reasonably looks like the daughter of Wotan; the ability of the audience to understand the action, only granted one year before by Met Titles for those not conversant with medieval Stabreim German; and a production that respects Wagner’s exacting stage directions, with Brünnhilde to be laid to sleep on a rock, surrounded by fire, under a pine tree.

It is this last condition that is most often observed in the breach. The Ring is the single greatest artwork created by one person, but it seems to invite adaptation by artists not near Wagner’s level. It would be a dull world where no modernized staging of the work were presented, but the opposite effect obtains: there is precisely one major Ring cycle left today that is staged largely in accordance with Wagner’s directions, and it is slated to disappear after this season’s performances at the Metropolitan Opera.

O, reader, if you would understand the collapse that Geithner, the Treasury and the Fed will bring about, and not fear it, you must hie to the Met for these last cycles, starting Saturday, March 28th. The emotional punch to the solar plexus delivered by Walküre will leave you with a lifelong visceral distaste for the Ring of Power. Only after watching the old order collapse at the end of Götterdämmerung, with newly freed humans crawling forth to build a new world, will you not fear the consequences of reckless statist inflation, but have a bucked-up resolve to build that just new world. Let the words of Persian poet Rumi invite you:

Come, come, whoever you are.
Wonderer, worshipper, lover of leaving.
It doesn’t matter.
Ours is not a caravan of despair.
Come, even if you have broken your vow
a thousand times
Come, yet again, come, come.

Thomas M. Schmidt [send him mail], a native of Brooklyn, will be there that sad day, April 25th, when the curtain closes for the last matinee on Otto Schenk’s magnificent Ring Cycle set; he urges you to spend whatever it takes to attend, and to go without reading anything beforehand about the work, to be followed after attending by reading Donington’s Wagner’s Ring and Its Symbols and Cooke’s I Saw the World End.

Thomas Schmidt Archives

Perhaps you have noticed a decreased level of freedom in American (and, indeed, world) society. You might have read about restrictions on freedom to travel, destruction of long-standing legal protections, police excesses perpetrated against citizens, maintenance of torture as federal policy, and a whole host of other depredations. If you are unfortunate, you may have been singled out for violating one of the rules scribed on the hundreds of thousands of pages of Federal Regulations and suffered more directly from a loss of freedom. Or you might simply have backtracked economically from the decline of economic freedom, in 1998 the fifth-freest economy in the world, 2001 sixth, and in 2005, twelfth (link behind the WSJ’s site walls).

Though you might blame any number of obvious villains and historical processes for this, the name Ebenezer Howard would probably not come to mind. Howard created the Garden City idea of moving population out of concentrated urban areas like London and into a country setting, (inspired by the socialist polemic Looking Backward) and proved a major influence on urban planning; Radburn, NJ, where perhaps the cul-de-sac was invented, is an example of a place constructed to his ideal. He is one of the villains of Jane Jacobs’ magisterial classic, The Death and Life of Great American Cities, although she takes pains early on in the book to avoid overt criticism of his motives.

Jacobs sees cities as the locus of economic creation; her first chapters detail the critical function played by commerce in the maintenance of order, an order she contends in Death and Life (and later also in The Economy of Cities) that arises spontaneously where conditions permit it. She shows that ancient cities were crippled economically by the large proportion of the populace whose work was considered unimportant economically (women and slaves), so that no improvements to the economic functioning could arise from them. This contrasted markedly with medieval European cities, about which serfs and peasants were known to remark that "Stadtluft Macht Frei," or city air makes one free.

Hilaire Belloc, in The Servile State, retraces the process by which Roman-era slaves were gradually emancipated to the level of serfs and then free peasants, a process he deplores disintegrating because of the Reformation. Jacobs, following Pirenne, credits the founding of medieval cities to vagabonds and other outcasts; they formed what she called depot cities (located at transport hubs or transshipment points) that became the nuclei of the new trading centers. Both agree that the city was a place of escape from manorial control, and provided an outlet for offspring of peasants whose inheritance did not include land.

Jacobs emphasizes, in Systems of Survival, that the Law created by the merchant classes to insure fair dealing encouraged new freedoms. (Similarly, Tim Case sagely contends that it was not the code of Justinian, but the code of the trader that guaranteed individual liberties.) She shows that commercial law is the basis of the later legal systems that grew upon the metropolitan economies. Importantly, because the city law was meant to serve commerce, rather than the State, it was infrequently used for oppressive purpose. A person’s freedom and rights did not arise in the countryside at Runnymede, but in the City of London, so despised of Ebenezer Howard.

Howard returns several times in Death and Life, most prominently in the chapter titled Unslumming and Slumming, in which Jacobs details how wealth creation and class-transcendence arise in the process of neighborhood improvement. She writes:

"The processes that occur in unslumming depend on the fact that a metropolitan economy, if it is working well, is constantly transforming many poor people into middle-class people. … Unslumming…has to do with the vigor…and choices…that these energetic economies produce. This energy and its effects — so different from immemorial peasant life — are so obvious in great cities… that it is curious that planning fails to incorporate them."

Why, you might wonder, do planners not account for the energy and vitality of cities? She continues:

"These odd intellectual omissions go back, I think, to the Garden City nonsense… Ebenezer Howard’s vision of the Garden City would seem almost feudal to us. He seems to have thought that members of the industrial working classes would stay neatly in their class, and even at the same job within their class; that agricultural workers would stay in agriculture; that businessmen (the enemy) would hardly exist as a significant force in his Utopia; and that planners could go about their good and lofty work, unhampered by rude nay-saying from the untrained. It was the very fluidity of the new nineteenth-century industrial and metropolitan society, with its profound shiftings of power, people and money, that agitated Howard so deeply…" (emphasis added)

Jacobs had started Death and Life by looking at her own neighborhood (Greenwich Village, where Mises worked at NYU at the same time that Jacobs was writing) and seeing it as a microcosm. Her first chapters contain delightful observations of street-level life which demonstrate how the urban environment stimulates the safe mixing people of different ages and backgrounds through the wonder of commerce. She stood aghast that Howard and his ilk would object to this much richer world and try to impose feudal strictures on it. She opposed policies she called "the sacking of cities." Many of these were local in nature, like the depredations of Robert Moses, who was barely stopped by community organization in Greenwich Village from plowing through what is today the tony SoHo district with an elevated expressway (indeed, Jacobs’ chapters on creating ideal urban neighborhoods build on the geographical and economic features of Greenwich Village to demonstrate how proper formation can create communities that can withstand political meddling), or Euclidean zoning, which segregates industry and housing.

However, Federal disruptions of community were both more severe and widespread. Jacobs offers the example of standardized housing mortgages under Fannie Mae that specified housing lot sizes and building coverages, effectively redlining urban areas and preventing the creation of dense new cities, making Atlanta or Dallas the ultimate expression of post-war Federal policy. Additional examples include the Federal interstate system, agencies like the TVA that drained urban areas through taxation, the "progressive" income tax itself that takes a higher proportion of urban dwellers’ gross income before expenses (like more costly housing) are paid, and flat-rate USPS postage that uses profits from dense urban areas to subsidize unprofitable RRD districts.

The greatest Federal contribution to the sacking of cities, of course, was made on August 6, 1945, when the danger to mass concentrations of people caused by homicidal megalomaniacs was made brutally clear. Whether Federal policy was inadvertent or systematic, Howard’s socialist-novel-derived dream was made concrete in the post-war suburb; that its car dependency and economic stratification atomizes people would not be considered a disadvantage by feudal Federal masters.

New York and other urban areas were not completely obliterated, however. 1989 saw the turning point; the collapse of the Berlin wall helped lower the threat of nuclear annihilation, one of the underpinnings of urban decentralization. Tiananmen Square led to an uneasy peace in China wherein economic freedom was to be permitted, but political freedom not immediately. In 1997 when China assumed political control of Hong Kong local businessmen made the argument that Hong Kong, in fact, was taking over China; the fact that the Chinese economy accumulated increasing surpluses over the following 10 years is testimony to this idea. Whether Hong Kong can free China faster than the US Federal Government can suppress New York should be an interesting footrace in coming years.

Jacobs’ idyll, Greenwich Village, remains the "happiest" part of New York. Its positive wealth feedback effects have caused it to outgrow its original boundaries and enliven nearby SoHo, the meatpacking district and the East Village, and through the lifeline of the L train, several neighborhoods in northern Brooklyn like Williamsburg, Greenpoint and Bushwick. Given time, the same commerce and open-exchange-based ethic could radiate outward to restore economic functioning and resistance to centralized political meddling. Because economic independence and political irascibility do not favor the Federal masters, they will do everything to prevent this; savvy lovers of liberty must always know which side to favor in the struggle between the market writ large in New York, and the court writ hypertrophic, in DC.

(Special thanks to "wonderful old curmudgeon" Jeff Zervas for feedback and editing.)

Thomas M. Schmidt [send him mail], a native of Brooklyn, knows well the timeless draw of the Village for youth, and still finds it a delight at any age.

Thomas Schmidt Archives

Belloc credits the rise of Christianity to the widespread despair in the Roman empire, born of a slave-owning society that could conquer lands across thousands of miles and pile up untold riches but whose poets, applying Tennyson’s phrase, were gripped with "the doubtful doom of humankind." Belloc does not mention how the Christian communities, not possessed of this doom, grew organically through birth and conversion so that 300 years after their initiation they numbered a cohort almost as large as the pagan population; Christianity did not conquer the Roman Empire by the sword.

Of course that conquest faced a major challenge not 300 years after its full flush of success: the rise of Islam. His work on heresy finally revealed to one writer the mechanism by which Islam grew so quickly. Belloc considered Islam a heresy of Christian doctrine, removing certain elements like the divinity of Christ but retaining others like its universality. As incomplete Christian doctrine, it appealed to tribes outside of the Christian area who had not been proselytized by Christians, and its growth amongst those peoples he takes almost as a compliment to Christian doctrine.

Islam, however, did not merely convert non-Christians. It also sought widespread conquest of territories that were Christian for hundreds of years, including the African homeland of St. Augustine. Belloc lists four conditions that created the tinder that Islam was to set alight: there was widespread, heavy debt; taxes were very heavy; a large proportion of the people were slaves; and law and theology had become more complex than most people could follow. Adhering to new rulers could resolve the first three conditions, while the simplicity of Islamic law and theology addressed the fourth. Even so, Belloc notes that most people did not convert en masse to Islam, but preferred to remain Christian and pay a tax to their new conquerors. Their conquerors, he insists, were welcomed, as the tax they levied was lower than the burden of excessive taxation that had previously supported the distant emperor in Constantinople.

This explains the wealth of the Islamic state so shortly after conquest: it was not consumptive of existing wealth, but instead encouraged economic growth through the removal of excessive taxation from a population that had been long oppressed. Belloc later notes the tax that was required of Christians and Jews over the following centuries led to the eventual near-total abandonment of Christianity in its historic lands, and the erasure of all but a token few Greek- and Latin-derived names, like Tripoli.

Not far from Tripoli, Ibn Khaldun noticed the same process as the Islamic conquest occurring when he wrote in the 14th century:

"It should be known that at the beginning of a dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments… Royal authority with its tyranny and sedentary culture that stimulates sophistication, make their appearance. The people of the dynasty then acquire qualities of character related to cleverness. Their customs and needs become more varied because of the prosperity and luxury in which they are immersed. As a result, the individual imposts and assessments upon the subjects, agricultural labourers, farmers, and all the other tax payers, increase. Eventually, the taxes will weigh heavily upon the subjects and overburden them. Heavy taxes become an obligation and tradition, because the increases took place gradually, and no one knows specifically who increased them or levied them."

Khaldun was concerned with the collapse of his own society as a result of injustice in taxation; Ronald Reagan famously quoted Khaldun’s observation on taxation in support of his own tax cuts. In this regard, Khaldun reflects writers like Gibbon, Tainter, and several LRC authors, who see in the collapse of Rome an allegory for the New Rome.

Belloc explained in the Servile State how having the state do more of daily activities would weaken the population. Indeed, we can see the effect obtain in the area of Social Security in the United States: because parents’ retirement income depends on the money extracted from everyone else’s children, not merely their own, there is a disincentive to have children or to invest wealth in them; Juurikkala covers this issue in greater detail. As a result, birthrates have dropped to near or below replacement levels in black, white and Asian American households.

Of course, not all groups are exhibiting low birth rates. The Amish, famously exempt from Social Security, demonstrate a rate north of 6 children per woman. Mormons also demonstrate higher birthrates, although that might drop with increasing wealth. Outside the US, Islamic birthrates remain high, but drop as literacy rates rise.

Meanwhile, the Federal Government arrogates to itself increasing wealth through taxation, borrowing and spending. All the debt piled up since the start of the current crisis will need to be paid through increased taxation on future generations, or the Rothbardian solution of repudiation. The great body of its taxpaying citizens will continue to suffer decrease as its wealth is diverted to DC. This reflects again the genius of Osama bin Laden, who understood both the history of Islam’s rise outlined above, and that the costs of the war on terror would bankrupt the US Government.

Conquest thus appears easy, without a shot being fired. With taxation high in the US to support the largest military budget in the world that Martin van Creveld demonstrated in 1990 to be obsolete, Islamic nations could draw off the most productive citizens simply by maintaining their opposition to income taxation, leading to economic and thence military collapse. Alternately, the decreased populations caused by oppressive states’ taxation can allow outside groups to simply walk in, unopposed, to practically homestead new territory in the best libertarian fashion. Through either route, when reflecting on the oppressions of the Federal State, recall that this, too, shall pass.

Thomas M. Schmidt [send him mail], a native of Brooklyn, recalls Vox Day’s warning that a fence designed to keep immigrants out can easily be turned into a fence to keep "taxpayers" in.

Thomas Schmidt Archives

Early reports indicate that the plane’s engines might have been disabled because a flock of geese intercepted its flight path, with large birds being sucked into both engines depriving of them of the power to maintain flight. On January 15th, one would think, most migratory waterfowl like geese would have flown south for the winter. Where, then, did these birds come from? The New York Times reports "Canada geese, a frequent visitor to golf courses and open spaces in the metropolitan New York area during the winter, pose a particular danger to planes because of their size. The impact of a 12 pound bird hitting a plane traveling at 150 miles per hour is equal to that of a 1,000 pound weight dropped from a height of 10 feet, according to experts on bird strikes."

The answer begins to reveal itself. The same geese that foul the pathways of suburban Westchester might just have caused this crash. The issue is not a new one; in fact, as Gail Collins wrote in 1999 about future suburban resident Hillary Clinton, "Like the president, geese are especially attracted to golf courses. Westchester County, where the Clintons have purchased a $1.7 million home, has more than 60 courses. This is an area under siege by fowl who appreciate the virtues of waterfront property and well-manicured lawns…Many of the first lady’s future neighbors seemed ready to follow any politician who would promise to make the resident waterfowl go back to migrating."

And why should "neighbors" support "politician(s)" who would make waterfowl migrate, something birds would normally undertake on their own? Well, the "Canada" geese are presumably migratory, and are covered by treaties: in other words, they are under the control of the Federal Government, which protects them from any harm. The fact that they do not migrate is immaterial: no state or local government can harm them in parks, and no private landowner of a golf course can shoot, trap or harass them from his property. Once again, uniform Federal rules have usurped local control and private property rights; thankfully, an accountable private airline’s pilot was there to protect us from our protectors.

Thomas M. Schmidt [send him mail], a native of Brooklyn, has swerved out of the path of many a goose dropping, and wonders why no one has surreptitiously introduced foxes to the golf courses and parks.

Thomas Schmidt Archives

Niles: It’s a wonderful expression. Just don’t know how true it is. Don’t see it turning up in a lot of opera plots. "Ludwig, maddened by the poisoning of his entire family, wreaks vengeance on Gunther in the third act by living well."

Frasier: All right, Niles. [heads into the kitchen]

Niles: [follows him] "Whereupon Woton, upon discovering his deception, wreaks vengeance on Ludwig in the third act again by living even better than the Duke."

You can seek political guidance from any number of potentially misleading sources, or look to literature and the arts to get a better understanding of human nature and the political animal. Many operas were composed under the threat of censorship, and so their creators had to be artful about crafting anti-state messages. With Niles Crane as an inspiration, you might well look to opera plots for guidance on how to live life. Here are a few lessons that I have learned about politicians and politics at the Metropolitan Opera House.

Start with Wagner’s magnificent Ring Cycle. Wagner composed the poem for the Ring shortly after being one of the leaders of the failed 1849 Dresden uprising to overthrow the King of Saxony; he earned himself a death sentence in Germany, and lived for years in exile as a result. As a "Young German," he was a socialist but not what Marx would later come to call a "Scientific Socialist"; Marx disparaged Proudhon and Wagner’s ideals as "utopian socialism." Wagner’s revenge is that his utopianism survives and thrives today, while serious intellectual thought has dispatched Marxism to the dustbin of history.

Wagner decided that the reason the revolution had failed was the lack of vision of the power elite to understand the world of love and freedom (and free love) that would free the elite as well. In Das Rheingold he created two characters who would vie for power and supremacy over the course of the tetralogy, Alberich and Wotan.

We first meet Alberich as a hideous dwarf lusting after three Rhinemaidens, swimming innocently in the Rhine. When he is unable to engage any, he grows frustrated. Later the Rhinemaidens tell him that the gleaming gold of the river bottom can be forged into a ring that grants power over the world; they do so lightly, as only one who forswears love can forge the Ring, and who would be so afflicted as to forswear love? His lust for female companionship thwarted, Alberich hungers for power: he curses love, seizes the gold, and forges the ring.

For George Bernard Shaw in The Perfect Wagnerite, Alberich represents capital, using the natural resources it has ripped from the earth to gain control and subjugate others. Indeed, Shaw cites the later example that the Ring grants the power to forge a helmet, the Tarnhelm, that allows its wearer to disappear while inflicting blows on a worker to spur him to more labors, and shows this as an allegory for the invisible ways that capital oppresses workers. Even so, Joachim Kohler (or was it Bryan Magee?) states the case more directly: Wagner’s point is not that forswearing love allows the achievement of power, but that the pursuit of power requires the pursuer to forswear love.

Deryck Cooke’s unfinished I Saw the World End captures this point in his discussion of the next male figure we meet in Rheingold, Wotan. Wotan, leader of the gods, has built a castle of lordly might and power, Valhalla. To pay for its construction he has offered Freia, the goddess of youth and youthful love, to the giants Fafner and Fasolt, the builders. Again, Cooke notes, the pursuit of power causes the pursuer to surrender the ability to love.

Wotan, however, offers to find a substitute for Freia, and he finds it in the Ring and the golden hoard that the Ring has allowed Alberich to amass. The giants agree, and Wotan steals the gold from he who stole it from the Rhinemaidens. Before he returns to his underworld home, Alberich places a curse on the Ring: whoever sees it will desire it, it will bring no joy to whoever possesses it, and in fact death is the end for anyone who wears it. Wotan reluctantly relinquishes the Ring at the end of Rheingold, but continues to scheme a method to obtain it once again.

Die Walküre, the next opera in the cycle, tells the tale of his continued search. While it ends in tragedy (indeed, should you want to understand tragedy as the Greeks meant it to be understood, a visit to the Metropolitan Opera this spring to attend a performance is essential), more important is Wotan’s monologue in Act II. Frustrated in his aims to recover the Ring, Wotan wills the end of the world and his own destruction; one imagines Hitler in his bunker likewise celebrating the destruction of the Germany that had failed him.

This idea of the main character’s seeking his own end had appeared before in Wagner’s oeuvre. The Flying Dutchman wants nothing but the End of Days, to end his wandering across the planet; one sees much the same characteristic in the knight Tannhaüser, in the opera of the same name. He returns from a long exile to the court of Hermann, the Landgrave of Thuringia. Hermann, an enlightened ruler, is celebrated by his subjects for his support of art, culture, and singing:

CHOR DER RITTER UND EDLEN

Freudig begrüssen wir die edle Halle,
wo Kunst und Frieden immer nur verweil,
wo lange noch der Ruf erschalle,
Thüringens Fürsten, Landgraf Hermann, Heil!

KNIGHTS AND NOBLES

Joyfully we greet the noble hall,
where may art and peace alone linger ever,
and the joyous cry long ring out:
To the Prince of Thuringia, Count Hermann, hail!

The music of which this is a part is stirring, far more so than any ever written to praise a democratic state. One wonders, did (Hans) Hermann Hoppe first glimpse the superiority of monarchy over democracy by witnessing the adulation bestowed upon Hermann?

Of course monarchy is not perfect, only better than democracy. Hermann was one of a number of princes ruling in what had been the Holy Roman Empire of the German Nation. Northern Italy was also blessed with dispersed political control that allowed it to develop economically far beyond Southern Italy; we next visit the court of the Duke of Mantua in the opera Rigoletto by Verdi.

Giuseppe Verdi was certainly well-versed in the ways of politicians and politics: he served as a Senator in the newly-consolidated Italian state formed from the Kingdom of Sardinia, his name was shouted as an acronym in support of the King becoming ruler of all Italy (Vittorio Emmanuele, Rei di Italia), and his Va Pensiero, nominally about captive Jews in Babylon. became the anthem for "captive" Italians. Even so, he was not unaware of the nature of the state, with independent Genoa celebrated in Simon Boccanegra, malicious murder displayed in Macbeth and Otello, and the scheming immorality of princes on display in Rigoletto.

Rigoletto is the court jester to the Duke of Mantua. As such, he serves to mock all who come to court, and to assist the Duke in his depredations. Count Monterone, whose daughter was seduced by the Duke, curses Rigoletto before being thrown into jail, and Rigoletto makes light of his plight. Rigoletto decides to try to assassinate the Duke after mocked noblemen threaten him; meanwhile, the Duke has caught sight of a new conquest, who turns out to be Rigoletto’s daughter. Rigoletto is tricked into kidnapping his own daughter for the Duke; when he later discovers that she is missing, he sings one of the great invectives against those fawning sycophants to power, Cortigiani, vil razza dannata (courtiers, vile damned race [simply utter the word Cortigiani next time you want to condemn one!]). His decision to kill the Duke sealed, he employs the assassin Sparafucile. Sparafucile decides to spare the charming young man but must still offer his employer a body in a sack, the body of the Duke’s latest conquest, Rigoletto’s daughter.

American audiences are often confused at Rigoletto: did not the conventional rules of drama and censorship under which Verdi operated require bad behavior to be punished? How then does the Duke escape the consequences? Here the political message resounds: the Duke is simply playing the role of the ruler in the state, and that role requires guile, charm, deceit, theft and murder. Rigoletto, however, does not have to succor that ruler, nor mock and oppress those denuded by the state. We all face expropriation by the state, but we must never pen excuses for it or celebrate the damage it inflicts on other people.

Displayed in these operas is two artists’ visions of the state: power will be desired by all, but ultimately incapable of achieving the ends that the power-seeker pursues, and it will lead to the seeker’s actual or metaphysical death; grasping for power, the political man will continue to seek the love he abandoned to obtain it; he will undermine all conventional morality in pursuit of affairs and material wealth; he might back the creation of art as a local hereditary monarch, but we above all have a duty to withhold our consent to his malicious acts from him, as tienne de la Botie among many others wrote. You can absorb these lessons directly and hear some wonderful music through May in New York, or at your local opera house.

Thomas M. Schmidt [send him mail], a native of Brooklyn, will be there that sad day, April 25th, when the curtain closes for the last matinee on Otto Schenk’s magnificent Ring Cycle set; he urges you to spend whatever it takes to attend.

Thomas Schmidt Archives

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From a south-facing aerie 21 stories (actually, thanks to triskaidekaphobia, 20) above ground level in Jersey City, New Jersey, it is possible in one sweep of the horizon to take in the entire economic history of New York City, and the geographic factors that determined much of it. Espied in the distance is the ridgeline of Brooklyn, sweeping over to Staten Island, marking the terminal moraine of the last glacial period; the detritus from that glacier lay across the path of the Hudson river and effectively dammed it, with the Hudson eventually carving through at what became known as the Narrows. One tower of the Verrazano Narrows bridge is visible across the mile-wide gateway to one of the best-sheltered harbors in the world, Upper New York Bay.

On the New Jersey Shore, the remains of great shipping empires litter the riverfront. The deepwater piers where railroads met incoming cargo ships are still there, but the railroads themselves are gone, save for the Hudson-Bergen Light Rail, running partially along a former Erie Railroad right-of-way; the port was moved long ago to Elizabeth, NJ, by the Port Authority of NY and NJ, despite the shallower waters there that required Army Corps of Engineering dredging to accommodate the newest container ships. Off in the distance, the southwestern horizon grants a view of Newark, which along with Brooklyn and Long Island City was a manufacturing center that helped make New York City, by itself, 10% of the US GDP during World War 2.

The route to Newark was paved in water by the Morris Canal that connected New Jersey with the Delaware River at Easton, PA. The greatest canal, the nation’s first superhighway, is not visible in any sense, but lies over 100 miles to the North. The Erie Canal was built with New York State money and made New York the premier East Coast port (and ironically created most of its wealth in New Jersey, where the railroads and docks that replaced that water-borne shipping eventually located), providing a shallow gradient along which the goods of the vast inland continent could meet the sea-going vessels.

Scanning back toward the New York side of the river, the sheltered harbor attracted the Dutch as settlers, and their street patterns are visible in the near-distance in the contours taken by the lower Manhattan skyline. (The glaciers that swept over the island made Manhattan the southernmost place on the Eastern Seaboard where rock met sea level, making that skyline possible.) The Dutch colony’s northern boundary of Wall Street was the site where, in 1929, the competition to erect the world’s tallest skyscraper took place between 40 Wall Street and the Chrysler Building. Closer in than 40 Wall, the gaping maw of the former World Trade Center site shows as dry land the river mud that once entombed a Dutch Ship, the Tiger.

Obstructing the view of many of these landmarks is a series of new residential towers, almost all of them having no roots in the second millennium. Glass-walled boxes fill the waterfront where once stevedores sweated; many appear to have ceased construction midway, either because of the oncoming winter, or because of the financial winter that has begun to settle on the landscape. Their million-dollar views have caused many of them to be priced exorbitantly, and the collapse of the financial economy on Wall Street suggests that many will lack buyers at prices sufficient to repay the development costs, much as 40 Wall Street itself made no profits for its builders.

New York, then, started with a tremendous geographical advantage, and grew through several stages: merchant port town as Dutch and English colony, gateway to the vast North American heartland, import-replacing manufacturing powerhouse, financial intermediary to the US and European economies, and ending with a luxury housing bonanza built on top of all that had previously contributed to its previous economic strength. Although the path from trader to manufacturer to financial colossus to fiat-money-exploiting scam artist seems a Gotham-unique tale, it recalls nothing so much as the fate of another great port city, Genoa.

Genoa is often known for its second-city act to its more famous (and tourist-venerated) rival, Venice. A visit in 2007 showed that this is unjust; indeed, it added a new city to the tourist-substitution list for Italy: Genoa for Venice, Ravenna and Verona for Rome, Lucca for Siena (there is no substitute for Florence!). Using the ever-excellent Cadogan Guide as a source, the following history is outlined.

Genoa was one of the four great medieval maritime republics, along with Venice, Pisa and Amalfi. Each built its fortune first on trade, bringing spices from the East and restoring the trade networks severed after the Roman empire collapsed. Trade, while risky, was always profitable. Genoa, not content to profit merely by the economic route to power, undertook to build itself a small empire. It conquered Pisa in the 13th Century, and set about adding territory to its domain; a Genoese, Giustiniani, led the defense of Constantinople in 1453. Conflict with Venice cost it much economic vitality, but its fate was perhaps most sealed when a navigator from it, Christopher Columbus, opened the New World to Spanish and Portuguese dominion, reducing the importance of Mediterranean trade.

Venice soldiered on as a trader and military power, helping defeat the Turks at Lepanto in 1571, but Genoa now pursued a different course. A saying cited by Facaros in the Cadogan guide is that "gold was born in America, died in Spain, and was buried in Genoa." Genoese bankers now became the financiers to Spain, and became wealthy as a result. They moved north of the medieval city and built their lavish palaces on the Strada Nuova (renamed by locals without a shred of pride in their independent history for that centralizing usurper, Garibaldi); unlike the palazzi of the Grand Canal in Venice, many of these buildings can be visited today as public structures, with one housing a university, three of them museums, and most of the rest banks.

Genoa focused less on the things that had made it great, its port and trading abilities, and more and more on financing activities. It began to need to sell off parts of its possessions, with the most fateful divestiture being the sale of Corsica to the French in 1766, three years before Napoleon Bonaparte would be born there, a French Citizen now able to enroll in military school in that country. Napoleon would later end Genoa’s (and Venice’s! After 1100 years!) independence when he invaded Italy in 1797. Genoa would recover economic vitality only in the 19th century when railroads connected it to the manufacturing powerhouse of Milan, allowing it to serve as the port to the world for that great city; the accretion of great structures continued in that century. Much of the medieval and Renaissance city was bombed by order of that old war criminal, but much has been restored today, and makes a fascinating visit (sadly, that most Italian institution, the well-timed [Friday] wildcat railroad strike, kept one writer from exploring Medieval Genoa by foot).

The lessons of Genoa apply to all cities and nations whose path to greatness was built on "the economic means to wealth," but that later sought to use finance to further their ends. The United States, in particular, has used the fiat dollar as a method of tribute from the rest of the world, growing more accustomed to luxury while selling off assets so that the net of foreign asset holdings in the US exceeds that of US holdings overseas by over three trillion of those fiat paper dollars.

New York has likewise suffered from its embrace of financial services and remote government. When its port was its own affair, the state invested its own money in raising its importance; although Austrians will disagree with this expenditure of public wealth, the original Federal system limited the damages to the citizens of New York and those who bought Erie Canal bonds. The railroads and shipping companies made their own private investments in infrastructure, and this profit-seeking behavior enriched the whole region.

New York’s decline began with surrendering control of its port to a less-accountable bi-state agency, the current Port Authority of New York and New Jersey. Its financial dominance was likewise assaulted by the Federal Reserve, chartered by that even-less-accountable consolidated Federal Government. The bubble financing began; the ephemeral wealth and tax collections eventually drove the state budget near to $130 billion, not far from California’s total expenditure, for a population twice the size; the salaries and rents paid in financial services helped drive other industries from the city, not to return. (It will be interesting to see how much tax revenue is collected on the empty buildings constructed at the height of this boom; in any case, they, and the government that expected them to support itself, are now white elephants.)

How far New York will fall remains to be seen. The world seems to have less need of financial engineers who can turn junk mortgages into AAA-rated bonds. The global economic crisis has lessened demand for those expensive waterfront apartments, so New York may not have enough pieces to sell off to maintain solvency. The city will indeed live through interesting times.

There are two hopeful indicators for New York from the tale of Genoa. First, many of the buildings constructed in the financial boom, while uneconomic and literally irreplaceable due to construction costs, are sumptuous and will stand and delight for centuries, as 40 Wall and Grand Central do today. Secondly, when the city returns to its historic advantage centered on its port, a large continent seeking trade with a now-larger world will still require the services of a place where ocean-going ships can interact with the land and quick-witted sharpies can cut fast deals, and New York should then be ready.

Thomas M. Schmidt [send him mail], a native of Brooklyn, looks forward to the day when Gotham, freed of imperial burdens and the financial revolutions of 1913, can return to the City Beautiful movement that birthed Grand Central, the New York Public Library and the monuments of a great metropolis, the important work of civilization interrupted since the First World War.

Thomas Schmidt Archives

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Barnacles
are hard-shell-encased creatures often found on the sides of ships.
They are of concern to people mostly because of the drag they increase,
causing shipping companies increased cost; one
estimate led to the calculation that over 41 million barrels
of oil are wasted due to them, costing over $2 billion with oil
at $50 per barrel. Of course, the sides of ships are not their usual
place of residence, which is typically near the shore and in the
inter-tidal zone.

The seacoast
is a harsh but productive environment for life; waves constantly
pound upon rock, to say nothing of the effects of storms. In this
situation, one would expect that the inter-tidal barnacles, taking
the constant assault of water and wind, would have sturdier shells
than ones of the same species living on the calmer nearby ocean
bottoms. In fact, the exact opposite effect obtains: barnacles in
gentler waters have stronger shells. The reason is evolutionarily
simple: barnacles exposed by the tides and battered by the waves
are more subject to predation and early death, and so more of their
life energy goes toward reproduction rather than building a tougher
shell before death takes them; a barnacle near the shore that built
a sturdier shell would get out-bred by faster-reproducing ones,
and so become extinct.

One attraction
of Austrian economics reflects its grounding in the long tradition
of natural law; economic laws are not made, but discovered, and
they are in force whether one recognizes or chooses to acknowledge
them. The same economizing that the barnacles must undertake in
the face of strife should likewise apply with other living creatures,
including man. In the area of constructing living quarters, one
can see some of the same effects encapsulated in the expression
"they do not build them like they used to."

Two
houses, each alike in dignity, show the effects of battering
of stormy seas on economic life. One has recently undergone renovation,
melding older and newer construction, and the other is largely unchanged
from its original format; the renovated house is older.

It is interesting
to observe the construction problems of the older house: its dimensional
lumber is oversized for modern usage, with 2×4 studs actually
measuring two inches by four inches. All other lumber likewise measures
out to exact inch measurements. Thus when adding new
studs to an older wall, it is necessary to take a current "2×6"
and rip it down to a stud that measures exactly 4 inches deep, increasing
material and labor costs. The older studs' wood is denser, having
come from old-growth trees; it resists and holds nails much better
than its shrunken modern counterpart. The older house's neighbor
has studs that are about 1.75×3.75 inches; modern 2x4s are 1.5×3.5
inches.

What could
cause this degradation in language, and inflation in the amount
of claimed wood offered for a fixed measurement? The older house
was built in 1910, its neighbor in the 1920s; the renovation is
a 21st-century affair. The older house was thus built
at the end of what Murray Rothbard called "the
golden age," a time of more honest money, with a century
from 1815 to 1914 of human productivity gradually
deflating prices by about 2% annually when compared to gold;
$20.67 was required to buy an ounce of gold when the house was built,
a price that had been so fixed for over a century.

In 1913, the
Federal Reserve act went into effect, centralizing control over
money and interest rates. Of course, gold coin would remain legal
currency at $20.67 an ounce until 1933,
when an enabling act, grown out of World War I, was used by Franklin
Delano Roosevelt to forbid the private ownership of more than five
gold coins per citizen; following this
act in 1934, the dollar price of gold was changed to $35 per
ounce. This nominal price, unavailable to citizens, was maintained
until 1972. Thanks to the Gold
Bullion Coin Act of 1985, it is set today at $50 per ounce.

The dollar,
then, which was once a relatively fixed measure like a pound or
a foot, has changed its size with respect to gold, and realistically
it is worth 1/40th of the amount it brought when the
older and newer houses were built; the effects of currency debasement
can already be seen in the decline in the standard of the 2×4. The
effects on home construction appear elsewhere, as more costly materials
and methods, which would last longer, are replaced with cheaper
materials and methods.

The craftsmanship
required to nail (By hand! With no nail guns!) lathing to studs,
and then apply three coats of plaster was made too expensive by
the uncertainty that a floating dollar and World
War Two manpower shortage introduced, and it was replaced by
the now-ubiquitous wallboard, made of gypsum. Walls were now less
prone to cracking, but less solid and soundproof, and more easily
dented. Plywood gradually replaced sawn boards (to great detriment,
as the
glue wears out in 40 years, causing houses to literally come
apart at the seams), and was replaced in turn by oriented strand
board, each substituting cheaper lumber for more expensive. At the
same time, artificially low interest rates caused labor in home
construction to be replaced by capital (something that should cause
labor unions to support honest money, but doesn't). The 1970s saw
the nadir of construction, with aluminum wiring replacing the copper
in many newly-constructed houses; not coincidentally, that era was
a time of massive commodity inflation and shortages driven by the
1971
suspension of the gold window by Richard Nixon.

More recent
times have seen even greater price instability. After the
relative calm of the Clinton years, gold prices started to gyrate
wildly in the 21st century, hitting a new nominal high
over $1000 an ounce. This instability was driven by Federal Reserve
interest rates of 1%, which set off a housing construction boom.
Because of the shifting standard in money, earning a return meant
exposing oneself to a minimum of time before selling a newly-constructed
house. As Christopher
Leinberger notes, the "future is not likely to wear well
on suburban housing. Many of the inner-city neighborhoods that began
their decline in the 1960s consisted of sturdily built, turn-of-the-century
row houses, tough enough to withstand being broken up into apartments,
and requiring relatively little upkeep. By comparison, modern suburban
houses, even high-end McMansions, are cheaply built. Hollow doors
and wallboard are less durable than solid-oak doors and lath-and-plaster
walls." He predicts that the exurban fringe will become the
"next slum."

One can thus
see the effects of shifting tides of currency values, abetted by
the battering of war. It has driven the construction of American
living quarters to a lower standard than that obtained in time of
peace. (Environmentalists
will hopefully note that those old-growth forests are gone,
a victim of both the tragedy
of the commons seen when private ownership is lacking and the
hypertrophic economic growth caused by fiat currency, reflecting
the same public choice effect that causes democracy
to be less stable, economically, than monarchy.) Fiat money
and war cause a drag on the economy; allowed to build, like barnacles
on the hull of the ship, they slow and eventually stop economic
progress. If the encrustation goes far enough, their weight will
eventually sink the economic ship.

December
3, 2008

Thomas M.
Schmidt [send him mail],
a native of Brooklyn, notes that the liberty-head dime he found
in his attic from 1910 buys about the same amount that it did back
then.

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It is passing
strange. Several months ago, it was not possible to obtain an obscure
academic text originally published in 1988 from the New
York Public Library without a wait of several weeks. That the
citizens of the city that in the late 1990s called itself the "capital
of the world" should in late 2007 be so interested in Joseph
Tainter's The
Collapse Of Complex Societies that a borrower couldn't even
extend the loan on a book by a week indicated that there was an
undercurrent of understanding: civilization, in its broad sense
and the narrower one of living in cities, was imperiled and hanging
in the balance.

Tainter sought
to analyze the process of societal collapse years before Jared Diamond
arrived at the territory, and wanted to do so in an anthropological
sense. So he sought a common element in the collapse of three advanced
civilizations, with a large urban population supported by an agricultural
hinterland (the same sort of urban model that Jane Jacobs earlier
used in Cities
and the Wealth of Nations). The common key, he decided,
was excess centralization, and he examined it in each of the societies.

Most LRC readers
will not be familiar with his two North American examples, including
the
Chacoan people near the four corners region in the US' Southwest.
Tainter's first example, however, is the most familiar example,
decried by Gibbon and those who still believe in the
myth of the Renaissance: the collapse of the Roman Empire in
the West.

Before examining
the long period of collapse, Tainter first spells out his thesis:
that a society will centralize and urbanize to the extent that the
marginal profits from centralization outweigh the marginal costs.
He does not cover in detail the Roman conquests in the East, but
these regions were certainly profitable for the Romans to conquer,
as seen at the very least by their economic viability in supporting
the Byzantine Empire for 1000 years after Rome fell.

Tainter does
talk somewhat about the wealth of Egypt, but the main part of his
tale begins with Julius Caesar's conquest of Gaul. While you
might expect that the Celtic region was not wealthy enough to
pay for the troops required to conquer it, Tainter lists the quantity
of gold that Caesar "earned" from his conquest, and shows
that it exceeded the costs of the legions, even outside the calculus
of the modern state where political gains at the expense of the
people still remain justified in the minds of the "public servants."

In addition
to conquering Gaul, Caesar also built
a bridge across the Rhine into Germany, where he marched his
troops around the countryside in a show of strength, to prevent
German raids into Gaul. He did not, however, attempt conquest. An
obvious reason could be the warlike and impecunious nature of the
German tribes at the time. Tainter does discuss the conquest of
Britain by Claudius, and how that conquest did not pay for its immediate
cost in gold and tribute (although Claudius did do better than Nero,
who famously went to war against Neptune, and returned with tribute
from the god in the form of seashells that he poured out for the
Senate). Rome did turn a profit from sacking Jerusalem around 70AD
and stripping the second temple of its gold, riches, and religious
objects, an event celebrated on the
arch of Titus (Roman Jews preferred not to walk under the arch,
with the exception of the founding of the state of Israel, when
a
Jewish delegation walked through the arch in the opposite direction
from the original Roman triumphal march). Later Roman conquests
were not profit-making opportunities, and the conquest
of the Parthians by Trajan was the last major expansion of the
empire, and one of the first provinces to be freed from Rome's control.

Britain and
Gaul were not highly industrialized, and so not a continuing source
of tribute in an amount sufficient to pay for the troops required
to be stationed in them after conquest. Indeed, Rome soon began
to invest in infrastructure to build Roman cities in the conquered
provinces. The most spectacular example extant is probably the Pont
du Gard, part of an aqueduct that brought water to the Roman
colony of Nemausus (modern Nimes), whose construction costs could
certainly not have been borne by local taxation. It was so well
constructed, however, that modern automobile traffic can still drive
across it, and it is possible to walk through the aqueduct atop
it. (Amusingly, a walk across the aqueduct at the top of the bridge
brings one face-to-face with a sign written only in English that
reads "Please do not push on the stones"; remember that
the next time you complain about the French not liking Americans.)

And here Tainter's
analysis applies. Roman military officers, and the Senate that backed
them, can perhaps best be faulted for having a "high
time preference," Austrian-school-speak for a short-term
mentality. The short-term profits from conquests would not cover
the long-term costs of occupation and "nation-building."
Once Rome ran out of sufficiently wealthy neighbors where conquest
would pay for itself, the long-term costs of garrisoning troops
in regions that were tax consumers began to weigh on the empire.
The wealthy East did eventually break away and continue, as it was
able to fund a large, centralized bureaucracy from the economic
proceeds of the region. In the West, population declined in the
countryside as farms were abandoned and become unprofitable due
to onerous taxation, this population decline coming before the collapse.
When the empire was no longer able to control its borders due to
lack of funding for troops (and diminished population of citizens),
it hired German mercenaries paid with land. Eventually, with nothing
gained from central control and no order supplied therefrom, the
Romans suffered a "crisis
of legitimacy of the state," and the last emperor was retired
by Gothic tribes.

That New Yorkers
knew enough to seek out this thesis indicates that they understand
the many historical parallels. Indeed, Washington, the Imperial
Capital, has continued to centralize control of the USA since the
War for Southern Secession from 1861 to 1865, and has turned a profit
from it. High tariffs after that war allowed the state to enrich
itself and its cronies, with no threat of free-trading ports in
an independent South. The income tax and Federal Reserve Act of
1913 allowed the Federal Government to extend its dominion over
the states and their citizens' wallets, able to extract tribute
from them invisibly by stealing the value of the paper dollars in
their pockets. World-War-Two-era investments in atomic weapons and
the military destruction and exhaustion of all other major powers
allowed the US government to extend tribute to the rest of the world
through a unique institution: the fiat paper dollar, ex nihilo,
sent overseas for goods, and backed by a threat of nuclear immolation
by the only state to use those weapons.

With this tribute,
the centralized state garrisoned
troops all across the globe and built great works in areas where
no "profit" could be turned. In place of the great aqueducts
of France, the new state built dams and the Tennessee Valley Authority.
The American Pont du Gard can be found spanning the New
River Gorge in West Virginia, a spectacular feat of engineering
that no local population could have paid for. The empire continued
to drain its tax producers in the East to support its tax consuming
states, with New
York suffering the largest deficit between Federal taxes and
"benefits." As in Rome, the
rural agricultural provinces depopulated as the cities swelled.

No city has
suffered more from this process than New York City itself, as its
wealth has been drained off to feed the ambitions of political masters.
But the New Rome might have reached the limits of its centralization
bonanza, as the recent bailout bill rejection indicates that the
people are no longer willing to be denuded through inflation to
support imperial projects; this happens while the Chinese and other
overseas investors practically forced the nationalization of Fannie
Mae and Freddie Mac in exchange for not ending the game of forced
tribute through paper dollars. If the margin has been crossed on
the profitability of centralized control, collapse of the central
state might be onrushing.

Here Tainter
offers a last ray of hope. The standard of living of citizens in
the new Gothic kingdoms actually ROSE after the collapse, as the
burdens of supporting the central state disappeared and the citizens'
taxes went to support local rulers who did provide some protection
in return for their exactions. Indeed, it was only after Justinian's
wars to reconquer Italy that widespread capital destruction caused
a significant economic decline, a decline not to be reversed for
over 1000 years.

Endeavors like
the Free State Project
(and measures like the Massachusetts income tax repeal, very
close to passage and needing
some funding to counteract state-loving media) now take on a
new urgency. A libertarian alternative to the centralized state
will offer beleaguered citizens a route to escaping the burdens
of unprofitable empire, and hasten its collapse, which need not
be the end of civilization and cities, but its and their rebirth.

October
3, 2008

Thomas M.
Schmidt [send him mail],
a native of Brooklyn, looks forward to the day when Gotham, freed
of imperial burdens and enemies, can rise to heights exceeding its
former summits.

DIGG THIS

The website
LewRockwell.com has as its slogan "Anti-State, Anti-war, Pro-Market"
with the explanation
given that its founder "is an opponent of the state, its wars
and its socialism." Given the founder's association with the
Mises Institute, the site has
come to be known as a "libertarian" website. Of course,
one needs to dig
a little deeper to discover the true mission of the site, and
it's contained in what is not opposed in the motto. Reading Human
Action, for example, reveals not simply a political or economic
theory, but Mises as an erudite writer well versed in fields outside
those realms, able to pun and quote at will in Latin and French
with the expectation that the reader will have the education to
understand or seek out the meaning. As such, he epitomizes the "older"
model of education within what C.S. Lewis in The
Abolition of Man has called "the Tao." One can
dispense with such terms if one simply understands that the cause
of the website, as with the Austrian school of economics, is the
advancement of civilization itself; the website serves as a port
in the storm that besets civilization.

Civilization
is a gradual process. As
Gary North notes, it results from the accretion over time of
the 2–3% increase in productivity, year over year, brought
about by the division of labor working in a society that respects
property and features honest money. It is not a "leaps and
bounds" process, but must proceed anew with each generation,
just as education must do.

The opposite
of civilization is not barbarism or savagery, both of which can
aspire to civilization, but instead the process of decivilization.
Austrian economics focuses on money and credit for one chief reason:
the real interest rate is that rate of exchange of the most marketable
good that balances the needs of borrowers and lenders, and sound
money will maintain a society's time preference for long versus
short-term investment; monkey with the interest rate or currency,
and you will shift a public's time preference towards short-term
returns and instant gratification. Given that much of the work that
supports a modern civilization has a duration that extends over
years, if not decades, a society that is unable to undertake long-term
investment is a society unable to maintain or grow its civilization,
and it is in fact one that is in the process of decivilizing.

Although it
seems most obvious that long-term investment is needed in an industrial
society, it also formed the foundation of agricultural societies.
It used to be said that "no man plants an olive grove for himself,"
given the long time between establishment and first harvest. A man
had to establish such for his offspring, and the society in which
he lived had to recognize the property rights of his children to
even allow him to consider such an undertaking that would never
profit him directly. Indeed, this is one reason why the olive branch
is a symbol of peace, and why destruction
of olive groves is so troubling to it.

Another example
is offered by the fortified wine industry of Portugal. Tawny ports
are commonly sold as 10, 20, 30 and even 40-year-old blends of wines
from different vintages. Even older are the Madeira wines, with
some only drunk (and first drinkable!) more than 100 years after
their creation. No one would work to create a Madeira if he expected
that his great-grandchildren's ownership of it might be terminated,
and so the fact that we can continue to drink ancient Portuguese
fortified wines today is testament to Portugal's maintenance of
civilization over the centuries (not coincidentally, Portugal managed
to avoid the two World Wars.)

The king of
Portuguese fortified wines, however, is the vintage port, another
wine that will last for years. As the Vintage
Port site explains: "A ‘Declaration’ takes place when the
producer believes that he has an outstanding port. Nature plays
a major role in this decision. For this reason, a Vintage Port is
only declared about three times every ten years." The 1990s
were good years for port, with 1991, 1992, 1994 and 1997 unequivocal
vintage years, with 1995 usually included as well.

As civilization
is a gradual process, so too is wine maturation. Indeed, it was
custom in certain English families to understand that it takes as
long for a boy to mature as it does for a good bottle of vintage
port, and so they would buy
a vintage from his birth year for father and son to drink on
his 21st birthday. As with mythological ontogeny
recapitulating phylogeny in which an embryo retraces the steps
in its evolution, so the child must recapitulate the civilizing
process, again with the gradualism with which civilization advances.

It would seem
that father's day would be a good time to reconnect to this ancient
tradition. So if you're wondering what to get that man with a child
born in 1988, 1991, 1992, 1994, 1995, 1997, 2000, or 2003, buy him
the gift that promises a sweet reward at the end of a long and tedious
process. The promise that he will share it with his child is the
hope that war, strife and disease will leave both unclaimed, and
that the process of civilization, the work of the Austrian school,
will continue.

June
14, 2008

Thomas M.
Schmidt [send him mail],
a native of Brooklyn, recalls the words that drive New Yorkers mad:
when he asked why the 1994 vintage should cost more than the 1991,
being younger, he was told that the 1994 “might be the vintage of
the century.” He looks forward to drinking that vintage in 2015.

DIGG THIS

The
recently-ended twentieth century is known for any number of positives,
with humanity's first walk on the moon, the harnessing of hydropower
and nuclear power to generate electricity, the growth in human population
to six billion inhabitants, the triumph over smallpox and polio,
and the general worldwide increase in wealth leading to the situation
at the century's end where the numbers of overweight and starving
people were nearly equal. Even so, the Y2k problem elicited a number
of wags to note that, since the computer systems would not know
that the year was not 1900, perhaps we could get a "do-over"
on the whole century.

The reason
for such wishful thinking is clear: the twentieth century saw two
massive world wars, a cold war with threats of nuclear annihilation,
and a gripping depression that birthed National Socialism and the
Soviet campaign of starvation in Ukraine. R J Rummel
estimated more than 170 million humans were murdered by differing
states and as high as 200 million died.

This came in
great contrast to the century that preceded it. The achievements
of the Western world in the nineteenth century, which we will date
starting with Beethoven's Eroica
symphony in 1804 and end in 1908 with Mahler's
Eighth Symphony and the rise of Schoenberg's
atonal music present a record of achievement and growth that
it is stunning today to contemplate. In motion, we have the steamboat
in 1807, the railroad in 1825 or 1830, the automobile in 1885, electric
traction and independent multiple control in 1887, and the airplane
at Kitty Hawk in 1903. Electricity, telephones, fax machines, telegraph
wiring and wires, and international connectivity under the ocean
all saw first light in this timeframe. Scientific discoveries abounded,
with X-rays, the germ theory of disease, and the periodic table
of the elements being only three small examples from physics, biology
and chemistry. In art music, the Romantic era launched by Beethoven
swept Wagner, Bruckner, Mahler and others in its wake; Verdi and
Puccini created timeless compositions for the dramatic stage. Politically,
regimes infringed on fewer human rights, especially in the area
of economics, and slavery, an ancient and worldwide practice, was
reduced to an insignificant institution by mostly nonviolent means,
excepting Haiti and the United States. For information systems purposes,
George Boole created a radically simplified logic that could be
decided by simple machines, Charles Babbage designed a machine that
could calculate, and Ada Lovelace demonstrated the skill of programming
logic machines.

It would be
understandable to fault the twentieth century for performing poorly.
However, we must also look to some of the problems bequeathed to
it by the nineteenth. First, that century spat forth the political
leaders responsible for most of those deaths by government, with
Stalin (1878), Franklin Delano Roosevelt (1882), Mussolini (1883),
Hitler (1889), and Mao (1893) being five of the top offenders. But
what allowed such leaders to pursue their campaigns grew from an
unresolved philosophical crisis as outlined by Friedrich Nietzsche:
the "death of God." As
explained by Tom Wolfe, "Nietzsche said this was not a
declaration of atheism, although he was in fact an atheist, but
simply the news of an event. He called the death of God a u2018tremendous
event,' the greatest event of modern history. The news was that
educated people no longer believed in God, as a result of the rise
of rationalism and scientific thought, including Darwinism, over
the preceding 250 years. But before you atheists run up your flags
of triumph, he said, think of the implications. u2018The story I have
to tell,' wrote Nietzsche, u2018is the history of the next two centuries.'
He predicted (in Ecce Homo) that the twentieth century would
be a century of u2018wars such as have never happened on earth,' wars
catastrophic beyond all imagining. And why? Because human beings
would no longer have a god to turn to, to absolve them of their
guilt; but they would still be wracked by guilt, since guilt is
an impulse instilled in children when they are very young, before
the age of reason. As a result, people would loathe not only one
another but themselves. The blind and reassuring faith they formerly
poured into their belief in God, said Nietzsche, they would now
pour into a belief in barbaric nationalistic brotherhoods: u2018If the
doctrines…of the lack of any cardinal distinction between man
and animal, doctrines I consider true but deadly' – he says
in an allusion to Darwinism in Untimely
Meditations –u2018are hurled into the people for another generation…then
nobody should be surprised when…brotherhoods with the aim of the
robbery and exploitation of the non-brothers…will appear in the
arena of the future.'"

The first vision
of this death, however, was a result of one of the great discoveries
of 19th-century physics, the second law of thermodynamics. Stated
simply, it says that disorder (entropy) always increases in a closed
system; if the universe itself is a closed system, the universe
will eventually dissipate into nothingness. The phrase "the
heat death of the universe" had entered the vocabulary.

The dominant
school of thought of the nineteenth century if summarized in one
word, then, was materialism. Its influence extended to a number
of areas, including Marxian economics, Darwinian evolution, legal
positivism, and atonal music; a logical consequence of materialism
is the determinism that underlies much of Skinner's
behaviorism. Indeed, if biology is naught but applied chemistry,
and chemistry is a science that follows exacting, deterministic
laws, then human thought and action, a biologic process, is nothing
more than the end result of a series of predictable chemical reactions
(with, perhaps, some randomness thrown into the chemistry by cosmic
rays) and completely lacking in what philosophers and theologians
call free will.

Against this
philosophic backdrop the (chronological) twentieth century sent
two intellectual warriors. Werner Heisenberg, born 1901, and Kurt
Gödel, born 1906, were two of the central players undermining
this deterministic, closed world. Heisenberg is best known for the
uncertainty
principle, which states that it is not possible to simultaneously
know the momentum and position of an electron; determining one necessarily
changes the other. In other words, there is no objective, determined
result of an observation; the observer himself can change the result
of an observation at a low-enough level; Janna
Levin observes that quantum mechanics means that chemical reactions
in the brain can no longer be deterministic, even while she doubts
that "random" provides any more room for a free will to
exist. Heisenberg became one of the founders of quantum mechanics,
which demonstrated that physics at a subatomic level was probabilistic.

Gödel
was a mathematician who worked on problems in the Principia Mathematica
(PM); as explained by Hofstadter,
PM was designed by Bertrand Russell to exclude "strange loops,"
one specifically stated as "Let
S be the set of all sets that don’t contain themselves. Does S contain
itself?" PM was supposed to be a system that excluded such
self-referential items by establishing a series of axioms and conclusions
drawn from them; everything that was true in PM was supposed to
be derived from other things held to be true. Gödel discovered
a second, obscure meaning to each of the axioms in PM, however;
each true item in PM could be also represented by a number, and
it was possible to create, using these numbers, true statements
that were not derivable in PM. The statement he created was, essentially,
"I am not provable in PM." (If it is provable in PM, then
it is not true, which makes PM inconsistent; if it is not provable,
it is true, but PM is incomplete, as not all true items in PM can
be derived in it.) In essence, in the most precise system of rules
designed by mankind, it was not possible to elucidate all the true
statements within the system itself; a logical consequence of this
is that no other system of rules could be complete, undermining
any number of areas, including scientific socialism.

These two developments,
quantum mechanics and the incompleteness
theorem, help to guide the direction that IS takes. The incompleteness
theorem is used to demonstrate the limits to what is computable,
through the Church-Turing
thesis. Quantum mechanics is the science that drives the increasing
capacity of information technology. In his 1960 article There's
plenty of room at the bottom, physicist Richard Feynman
discussed the abundant space available for the storage of, say,
the Encyclopedia Britannica on the head of a pin (the religiously
oriented will recall the vision of heaven offered by CS Lewis in
1956' The
Last Battle as an onion whose inner layers were "larger"
than its outer layers, a strikingly similar idea from the field
of literature). This vision becomes reality in the later part of
the 20th century and the next.

Two "laws"
discuss the resulting growth in capacity, Moore's Law and Metcalfe's
Law. They describe exponential processes of growth in transistors
and network value, respectively, and both go to explain a conundrum
as confusing as quantum mechanics for the person seeking to manage
change in information systems: the oncoming "free economy."
As
explained by Anderson, the logic is this: if the cost of a transistor
drops by 50% every 18 months, eventually it will be so low as to
essentially be free; the same effect obtains in computer disk storage
where capacity has grown even faster than transistor density. (Indeed,
quantum mechanics undergirds this growth, and will need to be harnessed
to continue it.)

Metcalfe's
Law describes the increase in value of a network as you add more
nodes to it; the increase is greater than linear, so that more users
increase value more than they increase costs. (Think, for example,
of the utility of EBay, where having more buyers and sellers increases
the overall value of the network.) The ultimate example of the value
of a network comes from the World Wide Web. Here
the creators of Google found, like Gödel, a second, hidden
meaning in the links that connected Web pages, a meta-meaning that
actually helped decide what web pages were most relevant when searching
for the answer to a web query. The resulting search engine has become
one of the greatest machines invented by mankind, and is the basis
for a corporation whose market capitalization as of May 1, 2008
is $180 billion, this for a company that did not exist ten years
prior.

The world of
information systems can offer exponential growth and wealth creation.
Integrating the exponentially-increasing bounty obtained from harnessing
quantum mechanics with the scarcity arising from the material world
is the central challenge of the 21st century. Information
systems is critical to this challenge; as a calculating and counting
machine, the computer has brought us the great age of quantification,
where most of our information is represented as a string of digits
(think of MP3 files, DVDs, and this website, for three examples).
Quantification leads to the perfection of Taylorism,
or scientific management, with its reduction of humans to cogs in
a machine, while paradoxically providing exponential growth and
non-linear, unquantifiable changes to companies and society.

Time, however,
is not unlimited for information systems in this integration. Two
events in 2006 are indicative. For one, on
one day in 2005 or 2006, more oil was pumped from the earth's
crust than had ever been done before, and has been done since: this
is the concept of peak oil, and suggests the literal and figurative
"end of the road" for the age of material progress which
has been built largely on the extremely profitable "energy
return on energy invested" obtainable from crude oil. On the
plus side, Tan Dun's opera "The Last Emperor" premiered
on December 21, 2006, arising from a composer whose success
has depended on satisfying paying customers in Wagner's brainchild,
the movie industry, and from a rising economic power, China; the
music is outside the mainstream of tonal Western art music, but
with the promise of a new and exciting age of art music composition
stretching out in front, and perhaps an end to the century we've
credited as "beginning" in 1908. It would still seem possible
to find a deeper order and harmony underneath the structure of musical
notes, and perhaps in other areas as well.

Understanding
these contrasting and conflicting centuries, and synthesizing new
strategies and possibilities from them for personal, organizational
and societal advantage and profit will be your task as a strategic
thinker in information systems. Know that you will make decisions
in a field essential to both materialist measuring of the world,
and non-linear qualitative changes to it. The work is challenging
but rewarding, and critical to the advancement of civilization.

Adapted
from a course lecture.

May
16, 2008

Thomas M.
Schmidt [send him mail],
a native of Brooklyn, thinks the course of the 20th century
would have been different had Mahler completed his tenth symphony
and hopes that art music from rising economic power China can help
the 21st century get the focus back on what the Durants
called the civilizing process "on
the banks."

Despite official
rates
of inflation that lack a certain honesty, there are always underlying
measures that track reality. An informal New Yorker's rule of thumb
indicates that the price
of a single ride on the subway system tracks that of a slice of
pizza in the city, and that when the slice goes over the cost
of a single ride on the system, a fare hike is headed the city's
way. Sure enough, when
April rolls around the cost to ride the system will have increased,
albeit at a lower rate than originally planned.

For now, the
fare will remain at $2 for a single ride. This increase compares
with the original fare for the system when it was privately run
from 1904 to 1940 of a nickel. The
old IRT was profitable until World War I, when wartime monetary
expansion increased the costs of its inputs, chiefly labor and especially
coal, while its nickel fare was contractually guaranteed with the
city and could not rise to reflect increased costs. It was only
Warren G. Harding's return
to normalcy after the war, with a sharp contraction and reversal
of inflation that allowed the company to continue to operate at
a profit and provide expanded service to the city. FDR's depression,
combined with competition from a city-run system in the 1930s, drove
the IRT and its private competitor BMT into the arms of the city
in 1940. The first fare hike after 36 years of private operation
and flat-rate fares followed soon thereafter, in
1948.

It is interesting
to note that the first fare's cost represented 1/413 of an ounce
of gold, set in 1904 at $20.67. The recent $2 fare represents about
the same percentage of the
50-day moving average of the price of gold, recently above $800
for the first time. Thus the 40-fold increase in the nominal fare
can be laid squarely on the monetary dilution at the hands of the
Federal Reserve; it is not coincidental that the first war "to
make the world safe
for democracy" crippled and eventually killed the private
provision of mass transit in New York City, and the aftermath of
the second world war gave the city its first fare increase.

In
any case, the "more
efficient" public ownership of the system commenced, and
a scant five years after the first fare increase yet without any
need to pay dividends to exploitative capitalist owners, the fare
rose again, to 15 cents. This, however, presented a problem, especially
in a city filled with as many irritable and rushed people as New
York is: how to drop only one coin into a slot to permit entrance
through a turnstile into the system? 1953
saw New York create its own sort of fiat currency, the subway
token; it bore the inscription "Good
For One Fare," a seeming eternal promise.

The 1953 token
held out at 15 cents until 1966, when the fare was raised to 20
cents. This first fare increase caught New Yorkers somewhat unawares,
but they soon figured out that they could stockpile cheaper tokens
to use after the fare hike. The system planners had not counted
on this rational response, and so, just
as Gary North noticed during the last days of the all-silver dimes
and quarters, a shortage appeared. There being only so many
dollars to invest in subway tokens, however, the shortage disappeared
after the fare hike.

The authorities
were ready at their next fare hike, in 1970. They replaced the smaller
token with a new, larger token, the first that this writer can recall
holding in his grubby little hands. The older, small tokens would
no longer work, but the hoarders did not suffer if they turned in
their tokens to token booths in time: they could exchange the tokens
for their previous cost, and buy new ones. Thus, "going long"
subway tokens allowed the New Yorker a free "call
option" on subway rides with no downside except lost time
and usually a 50% or higher upside.

The inflationary
seventies offered two more fare hikes, in 1972 and 1975, and both
times token speculators were rewarded. Later fare hikes had different
results. The Transit Authority countered with new tokens on several
occasions, and in 1989 even tried to limit token purchases to two
at a time. The chief reason for avoiding new tokens was the cost
in ordering new ones minted, and also the labor in changing over
all the turnstiles to accept only the newer tokens. The authority
had another bad surprise when the 1986 token turned out to be nearly
identical to a much cheaper token used nearby on the Garden State
Parkway, and so the offensive against the quick-drop, one-fare
token began.

Transit systems
designed by bureaucrats with no intention that masses of people
will ever use them, like BART
and the Metro
in Washington, DC, had long used an electronic card reading system
that read a fare card at entry and exit. Given the sparse ridership
on these systems, the inevitable traffic jam at exit as everyone
fished for his fare card was not too bad; New York's system had
long abandoned zone-based fares and so required payment only at
entry, as New Yorkers were more likely to trample the slow-of-exiting
than citizens of less-civilized cities (natural
selection, and all that). Since the system runs 24 hours a day,
365.25 days a year, there is no limit to the amount of riding that
one fare will buy. Even so, difficulties with token changeovers
led to the introduction
of the MetroCard in the mid-1990s, which allowed entry to the
system with an electronic swipe.

New Yorkers
did not take kindly to the MetroCard at first, and its use lagged.
An incentive was required to get them to discard their tokens, and
like all plastic and insubstantial currency issuers, the MTA had
an idea in July 1997: a free lunch. Or in this case, a free transfer
between subway and bus, eliminating the "two-fare zone"
from the city, and allowing each commuter to shell out only one
fare on his commute. In addition, for the only time in the system's
history, purchase of a MetroCard entailed a discount on fare, with
11 purchased for the price of ten. Never before had there been a
fare decrease (and, of course, never since!). Finally, the system
changed mass transit from a variable expense to a fixed one by introducing
a fixed-price unlimited fare card, $70 for 30 days of unlimited
usage. With the incentives of free transfers and unlimited ride
cards, MetroCard use increased while token use gradually dropped,
and tokens were abandoned in April, 2003, their memory only preserved
in the names given to locations where station agents sell MetroCards,
token booths.

The history
of the token encapsulates in miniature many of the issues that have
plagued the whole country in the last 95 years since the introduction
of the Federal Reserve, and especially since the Federal Government
outlawed
private ownership of gold in 1933. First, with
apologies to Nietzsche, one nation may try to lie to its citizens
with fiat currency, but the grimace that is the price in gold always
shows the truth: the fare to ride the subway in New York has increased
not at all in gold terms in 100 years, but the dollar in the pocket
has shrunk in value. Second, citizens will prefer a coin standard
with some sort of precious metal (brass in the case of tokens) over
an arbitrarily-valued piece of paper or plastic, and only the promise
of a free lunch (interest
on demand deposits with no penalty for early withdrawal, free
transfers where none existed before) will encourage them to exchange
coins for paper. Third, the government will always adorn its "tokens"
with slogans in which it does not really believe, like "Liberty,"
"In God We Trust," and "Good For One Fare";
the latter would be an example of fraud and expose the seller to
a lawsuit if it were a private concern that sold a token good for
one ride, and failed to honor its commitment. (This is only another
example of the limit of consumer redress of grievances in an America
dominated by public concerns.) Fourth, the coins and tokens of the
government agency will be gradually devalued in terms of intrinsic
metallic worth, as the token went from solid brass to a brass/steel
mixture, to a pathetic, shrunken coin of baser metal than brass;
just the same way, I recall discovering a 1956 silver dime from
its sweet ring when dropped, a delightful sound that today's clad
coins deny to children of all ages. And given the transition
in the denarius from silver to base metal over 1700 years ago,
this is an ancient practice. Fifth, the free ride in the fiat money
will lead to a boom; the subways have been increasingly packed,
although this is as much due to innovative pricing strategies that
brought more riders into the system.

New York will
undergo a new set of fare hikes in March, 2008. The Port Authority,
which operates New York's "other subway," the PATH
train, will increase
fares by 8.3%, but will for the first time offer an unlimited-ride
monthly card. The cost of a single subway ride will remain at $2,
but those buying rides in bulk will receive only 15% in bonus rides,
as opposed to 20% now, a 4.35% increase. However, the strange nature
of the peculiar fiat currency that is the fare card affords the
denizens of Gotham a unique opportunity: they can "print"
as much of it as they desire, at the current values, only needing
to worry about expiration of cards, a particular hazard with PATH
fares, but not
the new SmartLink card. So one method to beat the increase is
to buy as many rides as you expect to use over the next year, and
hope that inflation does not exceed the amount of the fare increase.
Another possibility suggests itself in this credit
card rebate offer, whereby every $150 in transit purchases until
March 31st will earn a $10 rebate, a 6.7% discount; combine
that with a decent
cashback card from the same company offering 3% cash back on
purchases, and it will be possible to pay as much as 18% less than
other New York subway riders in April for the same ride. And you'll
be taking part in a tradition that goes back 42 years to the first
token fare hike, and sadly shows no signs of stopping.

February
6, 2008

Thomas M.
Schmidt [send him mail],
a native of Brooklyn, swears vengeance on the Port Authority of
New York and New Jersey for cheating him out of 34 fares because
his fare card expired, and will give away at least 34 free rides
to strangers when he gets his new unlimited-ride PATH fare card
in March.

DIGG THIS

No words meant
to inspire thoughts of warmth and growth have ever brought such
a chill. A person hearing them played on radio might ahve wondered
if in fact he had heard correctly. President Bill Clinton's first
inaugural address began with a metaphor that hopefully a speechwriter,
in the long tradition of courtiers since King Canute, had written
for him. Canute
himself is credited with demonstrating to fawning sycophants
around him that, King though he was, he was unable to command the
forces of nature and hold back the tides.

Would that
Bill Clinton had showed similar restraint. "My fellow citizens,
today we celebrate the mystery of American renewal. This ceremony
is held in the depth of winter, but by the words we speak and the
faces we show the world, we force the spring." Of course,
the only persons speaking were members of the Establishment, so
"we" is what the rest of the "fellow citizens"
would normally refer to as "they," unless one buys the
idea that "we
owe the debt to ourselves."

The idea that
"they" force the spring is offensive on many levels. First
of all, spring will arrive in any case; would the Federal government
under Bill Clinton claim credit for the weather? Why use force at
all to achieve an end that would obtain in any case? How many resources
would be devoted to this banal achievement? The image brings to
mind the idea of forcing
paperwhite Narcissus to bloom in winter, an amusing and cheer-bringing
activity that unfortunately exhausts the bulb, which is then discarded.
In addition, the metaphor slights the position of winter in the
calendar, winter whose killing frosts have long served as free pesticide,
making temperate-zone agriculture, the modern division of labor,
and the civilization based upon it possible. Finally, why didn't
Al Gore object to this policy of accelerated warming?

The words were
simply a rhetorical flourish in a speech filled with bland exhortations
and political pabulum,
and as such could have been overlooked. However, President Clinton
went on to implicate the citizens in his folly: "You have raised
your voices in an unmistakable chorus, you have cast your votes
in historic numbers, and you have changed the face of Congress,
the Presidency and the political process itself. Yes, you, my fellow
Americans, have forced the spring." (The internal dissonance
of the speech is shown by his later selection of a biblical quote
to back his narrative: "And let us work until our work is done.
The Scripture says, u2018And let us not be weary in well-doing, for
in due season we shall reap if we faint not.'" One wonders
why we could not wait until spring was "due.")

Surely Americans
would never take part in an effort to "force the spring?"
One can think of life divided into four metaphorical seasons, with
youth placed firmly in the spring category; the example of Wagner
springs immediately to mind, along with a host of writers too
innumerable to mention. Two articles humorously temporally co-located
last December seem to indicate that subjects of the State have embraced
this rhetoric.

The New
York Times presented an article on "National Birth
Day," the day in the year when the largest number of births
occurs:

"For
decades and decades, the busiest day of the year in the nation's
maternity wards fell sometime in mid-September. Americans evidently
do a lot of baby-making during the cold, dark days of December,
and once a baby has been made, the die for its birth date has
largely been cast… In the last 15 years, there has been a huge
increase in the number of births that are induced with drugs or
come by Caesarean section. In either case, parents or doctors
can often schedule a baby's arrival on a day of their choosing.

Not surprisingly,
they tend to avoid weekends and holidays, when doctors have other
plans, hospitals are short of staff and the possibility of an
unfortunate birthday — Christmas Day, anyone? — looms. During
holiday weeks, births have become increasingly crowded into the
weekdays surrounding the holiday.

Over this
same period — since the early 1990s — the federal government has
been steadily increasing the tax breaks for having a child. For
parents to claim the full amount of any of these breaks in a given
year, a child must simply be born by 11:59 p.m. on Dec. 31. If
the baby arrives a few minutes later, the parents are often more
than a thousand dollars poorer.

Unless you're
a cynic, or an economist, I realize you might have trouble believing
that the intricacies of the nation's tax code would impinge on
something as sacred as the birth of a child. But it appears that
you would be wrong.

In the last
decade, September has lost its unchallenged status as the time
for what we will call National Birth Day, the day with more births
than any other. Instead, the big day fell between Christmas and
New Year's Day in four of the last seven years — 1997 through
2003 — for which the government has released birth statistics.
(The day was in September during the other years; conception still
matters.) Based on this year's calendar, there is a good chance
that National Birth Day will take place a week from tomorrow,
on Thursday, Dec. 28."

Parents wouldn't
really let tax policy set their child's birthday for life, would
they? For some, sadly, the answer is yes:

"So
to see if taxes were truly the culprit, Mr. Chandra and another
economist, Stacy Dickert-Conlin of Michigan State, devised some
clever tests. They found that people who stood to gain the most
from the tax breaks were also the ones who gave birth in late
December most frequently. When the gains were similar, high-income
parents — who, presumably, are more likely to be paying for tax
advice — produced more December babies than other parents…By my
calculations, about 5,000 babies, of the 70,000 or so who would
otherwise be born during the first week in January, may have their
arrival dates accelerated partly for tax reasons."

The economics
can be compelling. Calculations in TurboTax reveal that, if a couple
in New York State each of whom earns $40,000 annually adds a dependent
in a tax year, that couple can expect to see the combined taxes
at the Federal and State levels drop by about $1550. If the couple
earns $400,000, there is only a marginal $75 savings, and if the
couple earns less, the "bonus" increases. To put the numbers
in perspective, at a recent $800 for an ounce of gold, the couple
would save 1.9375 gold ounces; using the old French
bimetallic standard of 15.5 ounces of silver equaling one ounce
of gold, this indicates that the State has induced parents to induce
for thirty
(one ounce) pieces of silver.

Economics in
Germany, at the same time, were even more compelling. To encourage
the childbearing that Bismarckian
social security schemes naturally decrease, the German
State promised "Elterngeld" to each child born in
2007; show up on December 31st, 2006, and your parents
missed out on "67 per cent of their last net income tax free,
or up to 1,800 (euros; about 2600 dollars) – more than 1,300 – a month, for the first 12, or in some cases 14, months after the
birth." (One wonders what a benefit-milking couple with a German
parent and an American parent would do: perhaps deliver in Germany
between midnight and 6AM January 1st so as to claim the
birth in the new year in Germany and the old one in the USA? This
absurdity recalls Daniel Patrick Moynihan's exasperation with Federal
policy on aid to religious schools: books were allowed, but not
maps. Moynihan
wondered what would happen in the case of atlases, which were
in fact books of maps.)

The skeptic
might ask WHY the State offers such inducements. Germany faces a
crisis in paying for its social-welfare programs even larger than
the approaching demographic waves overlapping the American Social
Security system. Critical to receipt of the benefits in the USA
is to submit a child for enumeration in the Social Security system,
at an age before it can consent. Should the child not want a number,
getting rid
of it might be a challenge, for someone's good reason. The birthday,
of course, is permanent.

At least the
Germans' push led to better birthday selection. Unscientific surveys
of people whose birthdays lie between Christmas and New Year's reveal
that most would prefer a later or earlier date. The worst example
was the man born December 31, 1959, whose 40th birthday
celebrations were, let's say, a little bit overshadowed by larger
events. So if you are in one of those 5000 couples thinking of moving
a birth to 2007 from 2008, check the numbers first. Before you associate
yourself with the political class' shenanigans, buy your child a
$1550 present and deliver when nature and springtime would come
without force.

November
14, 2007

Thomas M.
Schmidt [send him mail],
a native of Brooklyn, understands why Italians, whose patron saint's
(Saint Joseph) feast day falls on March 19th, feel a little overlooked
in the USA.

DIGG THIS

Did you read
the one about the 25-year-old woman and the investment banker? It
is a bit of a New York morality tale, but Howard Stern made it a
national one by reading it on his program. Though it has been cited
around a number of places, you
can find the whole story online, from which the following excerpts
come.

THIS
APPEARED ON CRAIG'S LIST… I'm a beautiful (spectacularly
beautiful) 25 year old girl. I'm articulate and classy… I'm looking
to get married to a guy who makes at least half a million a year.
I know how that sounds, but keep in mind that a million a year
is middle class in New York City… Are there any guys who make
500K or more on this board?… I dated a business man who makes
average around 200–250. But that's where I seem to hit a roadblock.
250,000 won't get me to central park west. I know a woman in my
yoga class who was married to an investment banker and lives in
Tribeca, and she's not as pretty as I am, nor is she a great genius.
So what is she doing right?… Here are my questions specifically:…
What are you looking for in a mate? Be honest guys, you won't
hurt my feelings… Why are some of the women living lavish lifestyles
on the upper east side so plain? I've seen really u2018plain jane'
boring types who have nothing to offer married to incredibly wealthy
guys. I've seen drop dead gorgeous girls in singles bars in the
east village… How you decide marriage vs. just a girlfriend? I
am looking for MARRIAGE ONLY. Please hold your insults — I'm putting
myself out there in an honest way. Most beautiful women are superficial;
at least I'm being up front about it. I wouldn't be searching
for these kind of guys if I wasn't able to match them — in looks,
culture, sophistication, and keeping a nice home and hearth.

Well, she got
an answer:

I read your
posting with great interest and have thought meaningfully about
your dilemma. I offer the following analysis of your predicament.

Firstly,
I'm not wasting your time, I qualify as a guy who fits your bill;
that is I make more than $500K per year. That said here's how
I see it.

Your offer,
from the prospective of a guy like me, is plain and simple a crappy
business deal. Here's why. Cutting through all the B.S., what
you suggest is a simple trade: you bring your looks to the party
and I bring my money. Fine, simple. But here's the rub, your looks
will fade and my money will likely continue into perpetuity…in
fact, it is very likely that my income increases but it is an
absolute certainty that you won't be getting any more beautiful!

So, in economic
terms you are a depreciating asset and I am an earning asset.
Not only are you a depreciating asset, your depreciation accelerates!
Let me explain, you're 25 now and will likely stay pretty hot
for the next 5 years, but less so each year. Then the fade begins
in earnest. By 35 stick a fork in you!

So in Wall
Street terms, we would call you a trading position, not a buy
and hold…hence the rub…marriage. It doesn't make good business
sense to "buy you" (which is what you're asking) so
I'd rather lease. In case you think I'm being cruel, I would say
the following. If my money were to go away, so would you, so when
your beauty fades I need an out. It's as simple as that. So a
deal that makes sense is dating, not marriage… I hope this is
helpful, and if you want to enter into some sort of lease, let
me know.

Unstated but
assumed in all of this is what philosopher D.
C. Stove, in his book of the same name, would call a Darwinian
Fairy Tale, the fairy tale here being that because there
is a theoretical evolutionary basis for rich men to pursue beautiful
women, they must in fact follow this course. Stove, an Australian
who died in 1993, had an eclectic collection of traits: he was an
atheist with respect for if not belief in religious writing, a believer
in evolution but not the Darwinian explanation of it, a rationalist
who was opposed to ages of what he called Enlightenment, and apparently
took aim at a number of other topics, including post-structuralist
criticism and other ills of the modern age. One imagines him a loud-mouthed,
know-it-all, in-your-face, take-on-the-whole-world-in-a-second kind
of fellow; in other words, an honorary New Yorker.

Stove traces
the intellectual history of Darwin's Origin
of Species, showing how critically it relies upon that Anglican
parson's argument in the Essay
on the Principle of Population. Stove shows that Darwin,
having not learned not to use broad statements, claimed that Malthus'
principle applied to all species that had undergone evolution, including
Homo sapiens sapiensis, and that under the pressure to compete
and reproduce, each member of a species will always have the maximum
number of offspring that available food supplies would bear.

Using an almost
praxeological
approach (anathema to strict believers in quantifiable Science),
Stove reasons from first principles that this simply is not so.
(Not surprisingly, he is not
a fan of Karl Popper.) Even royalty, with practically unlimited
resources, would still limit the size of their families, often leading
to the extinction of their lines. Stove recounts that this was part
of the reason that what he calls Darwinists were so opposed to religions:
their moral codes interfered with what would happen in a state of
nature, which led mankind to not follow the precepts of evolution,
meaning that there was one species that did not follow the theory.
(Stove has a little fun with Richard Dawkins [although not as much
as these guys],
following Mary
Midgely's criticism of Evolution
as a Religion, by claiming that Sociobiology is merely a
religion following in the footsteps of its founding father, British
theologian William
Paley.)

Stove also
traces not just a hostility to religion amongst Darwinists, but
also an active support for Darwinism among socialists, communists
and national socialists. He implies but does not state that Darwinism
might be incompatible with free-market capitalism, though the iconoclastic
Stove gives little indication of whether he favors the latter.

This tale from
New York would seem to back Stove up on that point. Here, the institution
of property rights interferes with what should be the Darwinian
tale. Indeed, if the banker expected that his wealth would be quickly
seized, he might be more prone to using his position to secure favors,
as politicians
are
known
to do;
this echoes Hans-Hermann Hoppe's argument in Democracy,
The God That Failed. The same behavior would obtain in a
society where monogamy was not the norm, as seen amongst chimpanzees,
lions and kangaroos, to choose three examples at random; males compete
to gather the largest group of females, and there is no way to preserve
wealth beyond the stage of physical primacy. In this way, property
rights work against the natural aggression seen in societies where
"alpha males" dominate. That New York is not yet such
a place is only one pleasing conclusion to draw from this amusing
exchange.

October
27, 2007

Thomas Schmidt
[send him mail], a
native of Brooklyn, still gets a laugh when he thinks about a bumper
sticker he once saw: “Freud, Marx, Darwin. Two down, one to go.”

DIGG THIS

One reason
that the New York subway is so confoundingly hot these days was
written long ago and discovered in the 19th century:
the second law of thermodynamics. Economists will know the first
law by the acronym TANSTAAFL,
denying the ability to get something for nothing. The second
law, depressingly, tells you you cannot even break even. Thus,
the effort to air-condition subway cars will make those cars cooler
at the expense of making some other place hotter, but the heat generated
by the effort will increase the overall level of heat in the system.
The net result is temperatures approaching sauna levels; avoid 34th
street on the N/R/W line in the summer if at all possible.

The original
two subway lines in New York, privately owned and operated, used
a different method of cooling. Both the IRT,
opened in 1904, and the BMT
relied for cooling in part on operable front windows, as seen in
this BMT photo,
and this IRT
photo; this reflected these private companies' concerns for
the comfort of their customers. The IND division, opened
for first riders on September 10, 1932, was designed for speed
and long stretches of express runs; upsetting boys of New York,
the front windows would not open to allow in cooling breezes. The
IND, or "Independent" system, was built by the city of
New York, and added a third, competing subway system underwritten
by the public (this during the depths of the depression), which
eventually drove the other two truly independent systems into one
consolidated system in 1940.

All three systems
provide substitutes for pleasures so common in the suburbs that
they go unnoticed. The urban youth is denied the ability to drive
long distances in a convertible, and so his only chance to experience
the wind (along with dirt, dripping water, steel dust, and Federally-distributed
bacillus bacteria) in his hair is to camp out in the front of
a train equipped with an operable window; speeds of over 50mph and
the constricted shape of the tunnels will conspire to drive an impressive
volume of air through the front window. There are others, especially
those who grew up with only an IND subway nearby, who will simply
peer out into the gloom, until their appointed stop is reached.
Should visitors to the Mises
Institute's 25 Anniversary conference wish to avail themselves
of the chance to partake, a little explanation of the rituals of
the natives is necessary.

If the front
window is free, you may occupy it at will; lean against the compartment
where the motorman operates the train, and peer out down the tracks.
If you see one person in the window, you may lean into the left
side of the window; make no eye contact while the train moves, but
a nod when moving into position will secure your place as a member
of the "society." If there are two people, you may lean
against the pole directly behind the front window and stare out
as best you can, but you may not approach the window until one leaves.
If, however, there is one taller and older man at the window, with
a younger child on tiptoes straining to peer over the bottom edge
of the window, you must refrain at all costs from your urge to stand
over the child and look out the left side of the window. Like a
Bushman learning tracking, an Eskimo learning seal hunting, or a
father taking a son into a duck blind, a sporting skill (albeit
here completely useless) is being taught, one with which you dare
not interfere: hunting locals.

Locals are
the ungulates of the subway system. They carefully graze at intermediate
stations, lazily loading and unloading their feast of passengers.
Express trains are the raptors, the big cats, the top-line predators
of the subway system, stopping at far fewer locations yet still
concentrating a large proportion of the ecosystem's protein within
them. Denied the opportunity to hunt within the city limits, the
urban youth will be trained by caretaking older males in this ongoing,
forever-open-season hunt.

Learning to
track the elusive local starts with an understanding of the facts
of its motion. Since Franklin
Sprague (who in essence created the suburb through his work
with streetcars) invented multiple
unit control, the largest concern with a moving electrical train
has been the ability to stop it safely. The IRT, a private subway,
was designed with safety foremost in mind (curiously, absent the
direction of legions of bureaucrats), including the first railroad
fleet of all-steel cars in North America and an emergency system
for stopping trains before they could come into contact. As nycsubway.org
explains:

Although
not themselves signals, stops, or “trippers”, or “automatic train
stops”, as they are sometimes known, are a key component of the
New York City subway’s signal system. They are and have always
been used everywhere in the system to force trains to stop if
and when they attempt to illegally pass a red signal (one indicating
“stop”). The stop is a T-shaped metal rod about a foot long, usually
painted bright yellow, at track level, to the right side of the
track on the IRT Division and the left on the BMT and IND Divisions.
When the stop is raised by the signal system to the “tripping”
position, it engages a “trip cock” on the wheel frame (truck)
of a passing train, which cuts power to its motors and applies
its brakes in a “full emergency” application, bringing it to a
screeching halt, very possibly causing discomfort or minor injury
to passengers, but stopping the train as rapidly as possible.
That action is called tripping the train. Every car (not just
the first car) is equipped with tripcocks.

Stops are
an integral part of the signal system, and the key to its safety
strategy. All signals except dwarf signals have stops. The stops
are operated by a heavy mechanical spring and either an electric
motor or a pneumatic valve (the original IRT was all pneumatic
in this regard) — if electric power or air pressure is deenergized,
or fails, the stop is raised to the “tripping” position by the
spring. The signal system, therefore, drives the stop (forces
it down) when conditions are safe, not “raises” it when conditions
are unsafe (this exemplifies the general “fail-safe” design of
the signal system.)

This lengthy
explanation is not usually provided to the local-hunting initiate.
Instead, he will hear that the small metal stop itself will bring
the train to a halt, and marvel at the strength of its steel; he
will likewise know to associate the red light with a train's recent
departure from a stretch of track. He now knows enough to hunt.

Locals will
bleed a string of red lights out into the tunnel behind them. By
carefully tracking the progression of lights along the local track,
the hunter can become aware of the presence of a local, even before
drawing it into sight. He can now prepare for the kill.

The most humane
sort is where a local, unsuspecting, has just come to a stop and
not yet opened its doors to feed. The express will humanely sweep
past, smiting it with a mighty rush of air in one fell swoop. This
is the image that the hunter will have of the lion on the savannah,
humanely dispatching the springbok quickly.

This is incorrect,
however, as lions will usually kill by suffocation, a slow death
as the animal staggers forward. This, sadly, will happen as well
to the local trains, as they may futilely start to accelerate out
of their station in an attempt to catch up with and even pass the
express, before stopping once again to graze upon local-station
passengers and falling victim. Occasionally, however, one will make
it safely to meet the express at the next express stop, and survive
its ordeal; you may not hunt where you also stop.

It is possible
to bag many locals at rush hour, especially when hunting on the
Serengeti of the subway, the West
Side IRT. More experienced hunters looking for a challenge will
seek out the late-night quarry, when knowledge of train headways
indicates the slight chance that an express departing Brooklyn Bridge
will catch a local only near 110th or 116th
streets. Slight deviation in schedules will allow the local off
to the Bronx, safe once again from the expresses of the night.

If you wish
to participate, you must observe the rules on kills above. In addition,
you may not hunt locals as they gather in social groups near the
end of their runs, including south of Canal Street on the East
Side IRT, or near 67th Avenue on the Queens IND line;
this will allow the locals to properly reproduce and keep enough
available for other hunters (sadly, the subway can suffer a tragedy
of the commons.). The best hunting locations are on the IRT
in Manhattan (the 2/3, or 4/5 trains), the E/F in Queens, and, most
thrilling of all, the Flushing Line (7 train), best hunted in the
morning as the locals thunder towards the safety of Manhattan through
the open air, with the expresses in hot pursuit. Sadly, the "War
on Terrorism" will prevent
you from photographing your kills, so you will only have stories
to keep from the experience. It might be best to keep those to yourself.

October
11, 2007

Thomas Schmidt
[send him mail], a
Brooklyn native, thinks his earliest memory might be riding the
last wooden trains in New York, October 4th, 1969, the night the
Myrtle Avenue El closed.

DIGG THIS

Often confused as an artwork in support of the centralized state
and a vehicle for virulent German nationalism, Die
Meistersinger von Nürnberg (the Mastersingers of Nuremburg)
is an unalloyed expression of several ideas that can best be called
libertarian. It is the longest individual opera in the repertoire
of most opera houses today, and will take approximately six hours
with time for two intermissions. According to Professor Hans Rudolf
Vaget, it is the opera that is used to initiate newly opened opera
houses in Germany.1
It has been identified with German nationalism almost since its
initial performance, a scant three years before the Franco-Prussian
war created the centralized Wilhelmine Second Reich. After World
War I, at the restart of the Bayreuth festival in 1923, the rousing
chorus that ends the opera was oversung by an audience eager to
announce "Deutschland über Alles." It was a piece
exalted by the Nazis, who took inspiration from it to stage party
rallies in the unspoiled late medieval/renaissance atmosphere of
the city (later ruined
by Allied
bombing). It would seem to be an unlikely piece to support any
libertarian or minarchist positions, but a more nuanced examination
shows that the Richard Wagner of 1867–8 had matured from the
fiery
revolutionary of 1849, who befriended Mikhail Bakunin, advocate
of arson over Europe (and inspiration
for George W. Bush's second inaugural address?), and embraced
property and liberty.

The opera concerns the activities of a group of artisans in 16th
century Nürnberg who have banded together into a guild to further
the production and performance of art music. One of their number,
Veit Pogner, proposes that to show his support for art, he will
pledge his fortune and only daughter Eva's hand in marriage only
to the Meistersinger who can sing a song worthy of her (well, it
is the 16th century, after all!). A young knight, Walther,
seeks to win her hand by competing with an original song of his
own design, although he has had no formal instruction in the Mastersingers'
rules. He is rejected by the examiner, the town clerk Beckmesser,
who counts his many strikes against the rules. Only one Meistersinger,
historical poet and cobbler Hans Sachs, seems to recognize worth
in the knight's song. He prevents the knight from eloping in Act
2 by judging Beckmesser's wooing song, finding that it also conflicts
with rules both written and unwritten. Act 3 requires Sachs to take
his knight-pupil in hand in the crafting of a mastersong, while
rejecting the temptation to compete for the girl's hand, desperate
as she is to avoid having to choose Beckmesser. In the end, the
knight wins the girl, widower Sachs wins the adulation of the city,
and finally he brings the knight into the master's guild.

One suggestion that the opera has a libertarian bent is the list
of Wagner’s fans in libertarian circles.  Murray Rothbard loved
Wagner, a love reflected in and exceeded by his wife JoAnn, who
was a loyal member and benefactor of the Wagner Society, serious
scholar of his operas (the music, the language, the history), and
rapt attendee at Bayreuth and anywhere else she could hear the Ring
or any part of it. As a scion of the great Mitteleuropean Jewish
culture, Mises was certainly familiar with the opera, and if he
did not appreciate the economic model therein, he
certainly was warmly attracted to the utopia of the cobbler-poet.
I can't help but imagine that an aged Mises, in flight to New York
in 1940 from the European world that he knew, took some comfort
in thinking of himself as a Hans Sachs, an éminence
grise whose progeny would be the scholars and economic
revolutionaries he would come to shepherd through teaching and writing
while affiliated with NYU.

While Mises' economic thought was praxeological,
we cannot conclude from the opera whether Wagner would agree. Contrasted
to praxeology is the modern insistence in economics on econometrics,
or measurement, an effort to make economics a "hard" science.
This is best captured in Lord Kelvin's comment: "I often
say that when you can measure what you are speaking about, and express
it in numbers, you know something about it; but when you cannot
measure it, when you cannot express it in numbers, your knowledge
is of a meagre and unsatisfactory kind; it may be the beginning
of knowledge, but you have scarcely in your thoughts advanced to
the state of Science, whatever the matter may be." Hans
Sachs, Wagner's mouthpiece, has however a different understanding
of the world. He sings a song of praise for Walther's aria, which
he alone seems to have appreciated:

Und doch,
‘s will halt nicht geh’n:
Ich
fühl’s und kann’s nicht versteh’n: –
kann’s
nicht behalten, – doch auch nicht vergessen:
und
fass’ ich es ganz, kann ich’s nicht messen!

And yet
it just won’t go.
I
feel it, and cannot understand it;
I
cannot hold on to it, nor
yet forget it;
and
if I grasp it wholly, I cannot measure it!

Doch wie
wollt’ ich auch fassen,
was
unermesslich mir schien?
Kein’
Regel wollte da passen,
und
war doch kein Fehler drin.

But then,
how should I grasp
what
seemed to me immeasurable?
No
rule seemed to fit it,
and
yet there was no fault in it.

It would seem possible to understand a subject completely, like

Human Action, and yet not even begin to measure it!

After singing this aria, Sachs resolves to keep the artist Walther
in the city of Nürnberg. And this setting is the first indication
that this is an opera with minarchist overtones. Medieval Nürnberg
was a Free Imperial City, a place whose destiny would have been
set by the burghers of the town itself. (One recalls the expression
"Stadtluft
macht frei," indicating that here were no serfs, but free
men.) It is a small world (even if it was the site for the invention
of the globe); in Act 2, Eva does not even know all the small
alleys of the city. Still it was a prosperous world as the crossroads
of several trade routes; the city's access to spices has made it
the world capital
of Lebkuchen to this day. Sachs sings of his city "nestled
in Germany's middle, my beloved Nürnberg." The principle
of subsidiarity was in effect here, and laws and regulations
were made closest to the people to whom they applied.

It is also a place where rules of commerce have arisen through
the process of spontaneous order; gold is central to that process.
Wagner's Ring Cycle's stage events are set in motion when a deformed,
cave-dwelling Nibelung
forswears love to forge a ring of gold from the Rhine that will
give him the power he can use to force others of his race to mine
more gold for him. In contrast, gold backs the fortune of Veit Pogner
in Die Meistersinger, and its use is not aimed at gold for gold's
sake, but it serves as the backbone of commerce and exchange, as
when Pogner assists the knight Walther in selling his estate.

Gold is not used for its intrinsic values, but serves the values
of its owner. Pogner's motivation for pledging his fortune and daughter
is announced in his act 1 aria, "Das
schöne Fest, Johannistag"

In
deutschen Landen viel gereist,
hat oft es mich verdrossen,
dass man den Bürger wenig preist,
ihn karg nennt und verschlossen.
An Höfen, wie an nied’rer Statt,
des bitt’ren Tadels ward’ ich satt,
dass nur auf Schacher und Geld
sein Merk der Bürger stellt.
Dass wir im weiten deutschen Reich
die Kunst einzig noch pflegen,
dran dünkt ihnen wenig gelegen.
Doch wie uns das zur Ehre gereich’,
und dass mit hohem Mut
wir schätzen, was schön und gut,
was wert die Kunst, und was sie gilt,
das ward ich der Welt zu zeigen gewillt,

"Widely
travelled in German lands,
it has often vexed me
that people honor the burgher so little,
call him stingy and peevish:
at courts and in baser places
I grew tired of the bitter reproach
that only in usury and money
was the burgher interested.
That we alone in the broad German empire
still cherish Art -
by that they set little store…
but how this may redound to our honor,
and that with high resolve
we treasure what is beautiful and good,
the value of Art, what it is worth,
this I became resolved to show the world.2"

Art, rather than being scorned by the bourgeoisie, depends critically
on a group of independent economic actors whose consumer choices
impute value to it. Furthering this point, each of the Meistersingers
is also a burgher or artisan, and dedicates his free time to art
music. This of course contrasts with the often puerile anti-bourgeois
sentiments of movements like Dada.
To steal a phrase from Mao, Wagner posits the bourgeois society
as the sea within which true art swims.

This is not to imply that Wagner is an anti-elitist. Art music
must appeal to the burghers and the Volk of the town, but also the
elite, in the guild of the Mastersingers. After being asked "Would
you abandon the rules to the people!" by the head of the guild,
Sachs replies that he knows the rules, and has worked long to preserve
them. However, once a year, Sachs sings,

Doch
einmal im Jahre fänd’ ich’s weise,
dass man die Regeln selbst probier’,
ob in der Gewohnheit trägem Gleise
ihr’ Kraft und Leben nicht sich verlier’!
Und ob ihr der Natur
noch seid auf rechter Spur,
das sagt euch nur,
wer nichts weiss von der Tabulatur.

"I
should find it wise
to test the rules themselves,
to see whether in the dull course of habit
their strength and life doesn’t get lost:
and whether you are still
on the right track of Nature
will only be told you by someone
who knows nothing of the table of rules."

Here Wagner casts his lot with those who believe in Natural law,
and who believe that law is discovered, not made, something Rothbard
himself might have written into his own opera.

This natural-law focus is contrasted with the positive-law focus
of the town clerk, Beckmesser. Beckmesser has been cited as a Jewish
caricature in a number
of publications, and his pedantic insistence on the rules calls
to mind most immediately Shylock of The Merchant of Venice.

These explanations of his character ignore the more fundamental
facet of his character, however: he is a government bureaucrat.
You've met Beckmesser in modern America, many times, in the TSA
insistence on obedience at the airport, in the lock-step obedience
demanded overseas and perhaps
here to Federal policies, in the threat
to shock with 50,000 volts when compliance is not immediate.

Rules take on a meaning of their own for Beckmesser, instead of
serving art, and he, as the marker for the guild, is more intent
on listening for their infractions than he is on listening for masterly
art, for which Sachs upbraids him in Act 1. This insistence on following
the rules strictly is turned back on Beckmesser in Act 2, as Sachs
marks his many faults against stated and unstated rules in a reprise
of a song contest that Beckmesser has judged in Act 1. Beckmesser's
exasperation at having the rules he so narrowly applies to others
used against him is palpable, as when he complains

Sachs!
Seht, ihr bringt mich um!
Wollt ihr jetzt schweigen?

(SACHS)
Ich bin ja stumm!
Die Zeichen merkt’ ich; wir sprechen dann;

Sachs!
Look! You’re ruining me!
Won’t you be silent now?

(SACHS)
Indeed I’m dumb!
I was marking the faults: then we’ll talk;

All the above is done to great comic effect. This brings up another
point about Sachs' mastery that he might share with Rothbard: he
is not exasperated with the difficulties of the world, but approaches
them as one of the merry
men. As Lew
Rockwell himself says, he remains of good cheer in the face
of difficulty. He refuses even to demonize Beckmesser, insisting
he's not a bad fellow, just a little misguided. His bemused manner
also lets Walther know that those who oppose him are not evil, but
differ, and further that as the owners of capital, they are free
to set its price:

Die Hoffnung
lass’ ich mir nicht mindern,
nichts stiess sie noch über’n Haufen;
wär’s nicht, glaubt, statt eu’re Flucht zu hindern,
wär’ ich selbst mit euch fortgelaufen!
Drum bitt’ ich, lasst den Groll jetzt ruh’n!
Ihr habt’s mit Ehrenmännern zu tun;
die irren sich, und sind bequem,
dass man auf ihre Weise sie nähm’.
Wer Preise erkennt und Preise stellt,
der will am End’ auch, dass man ihm gefällt.

I shan’t
let my hope diminish;
nothing has yet overthrown it;
were it so, then believe me, instead of hindering your flight
I would have run away with you!
So please give up your resentment now!
You are dealing with men of honour;
they make mistakes and are content
that one takes them on their own terms.
He who decides prizes and offers prizes
expects also that people should please him.

Here also the idea of freedom comes to the fore. If Mises thought
that he was the last knight of European liberalism, he at least
understood the importance of living in liberty, and fighting to
keep things in the private space. Hans Sachs would understand the
distinction
between freedom and liberty; the knight Walther wishes to flee
"forth in freedom, where I belong, where I am master in my
own house," but Sachs knows that must not happen for many reasons,
not least being that the rules must admit a singer as masterly as
Walther. Living in liberty requires facing the forces that would
oppress, no matter how much an individual could flee or possess
internally the personal quality of freedom.

And liberty and commerce form the backbone of the opera's closing
aria. The most controversial part, which given subsequent German
history can seem a little creepy, is this:

Das uns’re
Meister sie gepflegt
grad’ recht nach ihrer Art,
nach ihrem Sinne treu gehegt,
das hat sie echt bewahrt:
blieb sie nicht adlig, wie zur Zeit,
da Höf’ und Fürsten sie geweiht,
im Drang der schlimmen Jahr’
blieb sie doch deutsch und wahr;
und wär’ sie anders nicht geglückt,
als wie wo alles drängt und drückt,
ihr seht, wie hoch sie blieb im Ehr’:
was wollt ihr von den Meistern mehr?.

That our
Masters have cared for it
rightly in their own way,
cherished it truly as they thought best,
that has kept it genuine:
if it did not remain aristocratic as of old,
when courts and princes blessed it,
in the stress of evil years
it remained German and true;
and if it flourished nowhere
but where all is stress and strain,
you see how high it remained in honour -
what more would you ask of the Masters?

Habt Acht!
Uns dräuen üble Streich’:
zerfällt erst deutsches Volk und Reich,
in falscher wälscher Majestät
kein Fürst bald mehr sein Volk versteht,
und wälschen Dunst mit wälschem Tand
sie pflanzen uns in deutsches Land;
was deutsch und echt, wüsst’ keiner mehr,
lebt’s nicht in deutscher Meister Ehr’

Beware!
Evil tricks threaten us:
if the German people and kingdom should one day decay, under
a false, foreign rule
soon no prince would understand his people;
and foreign mists with foreign vanities
they would plant in our German land;
what is German and true none would know,
if it did not live in the honour of German Masters.

Drum sag’
ich euch:
ehrt eure deutschen Meister!
Dann bannt ihr gute Geister;
und gebt ihr ihrem Wirken Gunst,
zerging’ in Dunst
das heil’ge röm’sche Reich,
uns bliebe gleich
die heil’ge deutsche Kunst!

Therefore
I say to you:
honour your German Masters,
then you will conjure up good spirits!
And if you favour their endeavours,
even if the Holy Roman Empire
should dissolve in mist,
for us there would yet remain
holy German Art!

What appears at first as something that could be abused by a nationalist
centralizing government is in fact no such thing. Art was supported
previously in the courts of old (and one recalls here that the Holy
Roman Empire was an unconsolidated reign of over 300 independent
countries), and now by the burghers, on whom Wagner has said that
it depends critically. The State, however, has nothing to do with
it: if it crumbled into dust, art (and one presumes commerce) would
yet remain; it precedes and will supersede the State. In this sentiment,
Wagner echoes the Durants in The Story of Civilization: “Civilization
is a stream with banks. The stream is sometimes filled with blood
from people killing, stealing, shouting, and doing things historians
usually record – while, on the banks, unnoticed, people build homes,
make love, raise children, sing songs, write poetry, whittle statues.
The story of civilization is the story of what happens on the bank.”

There are many other points to the opera that the libertarian would
enjoy from a philosophical standpoint, but we leave those for discovery
in the theater itself. Die Meistersinger will not return to the
Metropolitan Opera until perhaps the 2008-09 season. When it does
so, the libertarian will not be disappointed to invest six hours
to enjoy Wagner's libertarian masterpiece.

Notes

1. New
   York Wagner Society Lecture and discussion on "Between Music
   and Autobiography: On the Meaning of u2018Holy German Art' in
   Die Meistersinger." 22 April, 2003.
2. Libretto
   and translation from http://www.rwagner.net/libretti/meisters/e-meisters-a1s3.html

October
2, 2007

Thomas Schmidt
[send him mail], a
Brooklyn native, is eternally grateful that he took music theory,
even if he could never distinguish between a diminished seventh
and augmented fifth chord.