Wednesday, February 27, 2013

Bernanke to End Too Big To Fail!

Federal Reserve Chairman Ben S. Bernanke said he wants to end investor perceptions that the largest U.S. financial institutions will be given taxpayer bailouts to prevent a collapse.

Well, he at least wants to end investor “perceptions” about bailouts.  Not necessarily end the bailouts, just the perception of the bailouts.

“As somebody who’s spent a lot of late nights trying to deal with these problems and the crisis, I would very much like to have the confidence that we could close down a large institution without causing damage to the rest of the economy.”

I guess he wants to have the “confidence” that he “could” close down a large institution.  He isn’t saying he would, just that he could…and be confident about it.

[Senator Elizabeth] Warren cited a Bloomberg View article estimating that the largest U.S. banks receive an implicit taxpayer subsidy amounting to $83 billion a year because their funding costs are lowered by the perception they won’t be allowed to fail.

“I think we should get rid of it,” Bernanke said.

But to get rid of it would require getting rid of central banking.  What gives, Ben?

“Over time you’ll see increasing market expectations that these institutions can fail,” [Bernanke] said.

Forget “market expectations,” what about market reality?

“The benefits of being large are going to decline over time, which means some banks are going to voluntarily begin to reduce their size.”

Fat chance.  The Fed exists to protect these large banks.

End the subsidies.  End the Fed.

Friday, February 22, 2013

Decentralization Hidden in the Dark Ages

For longtime readers, this is a condensed version of the several posts I have made on this subject.  I have also added a minor amount of new material.

Examples of decentralized society in history are often hidden.  They are hidden because those in decentralized societies never bothered to keep records.  They are also hidden for the purposes of the current state.  I have previously written about anarchy in the Southeast Asian Highlands as one example.  Here, I will present the time of the Middle Ages as another.

This time offered a system of private law.  A law not based on the edicts of the king, but based on local tradition and culture.  The king was not above the law, but equally subject to it.  For law to be law, it must be both old and good.  Each lord had a veto power over the king and over each other law (I will use the term “lord” for those landed free men.  Even the serfs could not be denied their right without adjudication.  Land was not held as a favor from the king; title was allodial.  A man’s home truly was his castle.

Although the term has fallen out of use in the academic community, for many this period is known as the Dark Ages – with all of the associated stereotypes: barbarians, boorish behavior, and the uncivilized society that came to Europe with the fall of the much more civilized Rome.

From Wikipedia:

The Dark Ages is a historical period used for the first part of the Middle Ages. The term emphasizes the cultural and economic deterioration that supposedly occurred in Europe following the decline of the Roman Empire.  The label employs traditional light-versus-darkness imagery to contrast the "darkness" of the period with earlier and later periods of "light".

The (Not So) Dark Ages

How did people live absent a strong central power (Rome)?  In what manners was governance achieved?  How did such a society evolve over the centuries into the nation-states of Europe?  From whose perspective were these ages “dark”? 

Hans-Hermann Hoppe, in his essay entitled “On the Impossibility of Limited Government and the Prospects for a Second American Revolution,” makes reference to certain aspects of this time period in history:

Feudal lords and kings did not typically fulfill the requirements of a state; they could only "tax" with the consent of the taxed, and on his own land every free man was as much a sovereign (ultimate decision maker) as the feudal king was on his.

Tax payments were voluntary.  On his land, each free man was as sovereign as the king.  This doesn’t seem so “dark.”

Hoppe quotes Robert Nisbet:

The subordination of king to law was one of the most important of principles under feudalism.

The king was below the law.  This might be one factor as to why the time period is kept “dark.”

Hoppe references a book by Fritz Kern, “Kingship and Law in the Middle Ages.”  The book was originally written in German in 1914, and is a thorough and eye-opening examination of the relationship of king and lord during this time period, as well as the relationship of both king and lord to the law.  I will rely upon, and will quote extensively, from this book throughout this essay.  Except as noted, all quoted items will be from this book.

During the early Middle Ages, there was no concept of a Divine Right of Kings, nor did the earlier period hold to the idea of kingship by birthright.  These ideas developed over the centuries and only took shape in the late Middle Ages.  Contrary to these, in the early Middle Ages…

…an act of popular will was an essential element in the foundation of government….

To become king required consent of those doing the choosing.  Additionally, the king did not hold absolute power:

…even the rudiments of an absolutist doctrine had scarcely appeared.

Both the king and the people were subservient to the law – and not an arbitrary law, but a law based on custom, “the laws of one’s fathers.”

All well-founded private rights were protected from arbitrary change….

Germanic and ecclesiastical opinion were firmly agreed on the principle, which met with no opposition until the age of Machiavelli, that the State exists for the realization of the Law; the power of the State is the means, the Law is the end-in-itself; the monarch is dependent on the Law, which is superior to him, and upon which his own existence is based.

The king and the people were not bound to each other, but each was bound to the Law, giving all parties responsibility to see that the integrity of the Law is maintained.  A breech by one imposed an obligation on the other to correct the breech.  The relationship of each party (king and lord) was to the Law, not to the other party, and each had duty to protect it.

Contrast this to the situation today: whereas today it is an illegal act for the people to resist the government authority, during this period after the fall of Rome the lords had a duty to resist the king who overstepped his authority.  This is not to say that such challenges went unopposed by the king –physical enforcement by the lords was occasionally required – however, the act of resistance in and of itself was not considered illegal.  It was a duty respected by king and people alike.

Sunday, February 17, 2013

Ron Paul Dot Com 2.1

This is version 2.1 because it is not a completely new version, but only a clarification of one aspect of my previous post.

I ended my last post on this topic as follows:

I am certain there are many details of the regulatory procedures that I have not captured….I am open to further understanding on this issue.

In reviewing my previous article and some of the links, I found a glaring instance of just such a miss.  It was right under my nose, in an LRC blog post….

ICANN has four approved arbitration organizations.

In that light, I offer the following from ICANN:

Complaints under the Uniform Dispute Resolution Policy may be submitted to any approved dispute-resolution service provider listed below. Each provider follows the Rules for Uniform Domain Name Dispute Resolution Policy as well as its own supplemental rules.

There are four listed dispute-resolution service providers, one of which is WIPO – the provider housed within the UN.  This is counter to what I had previously written:

ICANN has chosen WIPO to adjudicate such disputes.

There is something else from the above-mentioned LRC post:

Because the guys registered Ron's name in Australia, the international arbitration option must be used.

In my quick review of the four providers, one seems to be US-based, one in Europe, and one in Asia.  The fourth is WIPO. 

Still, this leaves some room for conflict with the language at the ICANN site, which states that claims may be submitted to any provider on the list.  Is it possible that the language at the ICANN site is a general statement, with many devils in the many details?  After all, lawyers and regulators rarely write so clearly and succinctly. Is it possible that it is ICANN and not the claimant that selects the provider, based on factors of the specific claim?  As indicated at LRC, could geography determine?  The statement could be read this way:

Complaints under the Uniform Dispute Resolution Policy may be submitted [by ICANN] to any approved dispute-resolution service provider listed below.

Or this way:

Complaints under the Uniform Dispute Resolution Policy may be submitted [by Claimant] to any approved dispute-resolution service provider listed below.

I have no idea, but this could explain and therefore eliminate the seeming conflict.  It would take someone familiar with such proceedings to clarify this language.  That isn’t me.

As I have mentioned before and will do so again: I have no opinion one way or another about which party will prevail in this issue, nor does it make any difference to me.  I know little about the details of the dispute, and virtually nothing about the law.  I have no desire to get in Ron Paul’s head and figure out why he did this.  My intent has been to answer and remains in answering the following:

1)      What is the process?
2)      Is there some violation of libertarian principle / NAP in Ron Paul’s action?

I am working on a follow-up post.  In this upcoming post, I will summarize some of the discussion that my earlier post generated, including further developing some of my replies.  I will also address some statements made in a Huffington Post article on this subject.  Finally, I will further develop my views regarding UN involvement in this matter.

Wednesday, February 13, 2013

Ron Paul Dot Com 2.0

This is a revised and extended version of my earlier post in this subject.  I now have a better (call it an “educated layman’s”) understanding of the required procedures to resolve such disputes and have incorporate these into this post.

I don’t believe this subject needs introduction, however this is posted at the site in question,

Earlier today, Ron Paul filed an international UDRP complaint against and with WIPO, a global governing body that is an agency of the United Nations. The complaint calls on the agency to expropriate the two domain names from his supporters without compensation and hand them over to Ron Paul.

My immediate reaction to this was…unsettled: United Nations, expropriate the property of the current owners, without compensation….

Ron Paul has earned enough goodwill with me to last nine lifetimes – unless he joins the Fed Board of Governors or the Board of Directors of one of the merchants of death, I am not sure he can spend even a few drops of the goodwill I have toward him.  I do not worship him as perfect; I just respect the significance of what he has accomplished over his lifetime.

But even with this, the action by Dr. Paul initially didn’t sit well.

I do not have specialized knowledge about the procedures and processes involved in this process.  So it would seem helpful to first understand a few basics:

What us a UDRP Complaint?

The UDRP (Uniform Domain Name Dispute Resolution Policy) is the original domain name dispute policy. It was adopted by ICANN (the Internet Corporation for Assigned Names and Numbers) on August 26, 1999. The UDRP applies to domain names ending in the following extensions: .biz, .cat, .cc, .com, .info, .mobi, .net, .org, .ro, .tel, .travel, .tv, .web, .ws

This Uniform Domain Name Dispute Resolution Policy (the "Policy") has been adopted by the Internet Corporation for Assigned Names and Numbers ("ICANN"), is incorporated by reference into your Registration Agreement, and sets forth the terms and conditions in connection with a dispute between you and any party other than us (the registrar) over the registration and use of an Internet domain name registered by you.

It is the registrant (current registrant of that has agreed to this process.  The claimant (Ron Paul) is following the process that the registrant accepted at the time of registration.

What representations are made by the registration applicant?

By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (a) the statements that you made in your Registration Agreement are complete and accurate; (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else's rights.

The Policy goes on to outline the circumstances under which a change or transfer to a domain name will be effected and the requirement of submission to a Mandatory Administrative Proceeding.  Even though submitting to an administrative proceeding is mandatory, this does not preclude the possibility of additionally submitting to court proceedings.

The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded.

From Wikipedia:

One of ICANN's first steps was to commission the United Nations World Intellectual Property Organisation (WIPO) to produce a report on the conflict between trademarks and domain names. Published on 30 April 1999, the WIPO Report[4] recommended the establishment of a "mandatory administrative procedure concerning abusive registrations", which would allow for a "neutral venue in the context of disputes that are often international in nature." The procedure was not intended to deal with cases with competing rights, nor would it exclude the jurisdiction of the courts. It would, however, be mandatory in the sense that "each domain name application would, in the domain name agreement, be required to submit to the procedure if a claim was initiated against it by a third party[5]

Following adoption by ICANN, the UDRP was launched on 1 December 1999, and the first case determined under it by WIPO was World Wrestling Federation Entertainment, Inc v. Michael Bosman, involving the domain name[6]

It was ICANN that introduced the UN into the process, or more accurately an arbitration service (WIPO) housed within the UN.

So, what is ICANN?

Saturday, February 9, 2013

Ron Paul Dot Com

I don’t believe this subject needs introduction, but just in case:

Earlier today, Ron Paul filed an international UDRP complaint against and with WIPO, a global governing body that is an agency of the United Nations. The complaint calls on the agency to expropriate the two domain names from his supporters without compensation and hand them over to Ron Paul.

My immediate reaction to this was…unsettled: United Nations, coercion, private property of the current owners….

Ron Paul has earned enough goodwill with me to last nine lifetimes – unless he joins the Fed Board of Governors or the Board of Directors of one of the merchants of death, I am not sure he can spend even a few drops of the goodwill I have toward him.  I do not worship him as perfect; I just respect the significance of what he has accomplished over his lifetime.

But even with this, the action by Dr. Paul initially didn’t sit well.

I read the complaint.  It reads just like a typical legal complaint.  This got me to thinking….

If I felt wronged in some manner, I would first attempt to work out a resolution with the other party.  As long as this was proceeding in a timely manner, with the other party negotiating in good faith, I would continue in this course.  Ultimately, if I felt appropriate resolution through this approach was not likely, I would pursue recourse in the court of competent jurisdiction.  Unfortunately, in our society, such courts are government courts – housed in some level of government.

Certainly the end result of a court decision is force.  Yet even the most libertarian of society must develop some form of dispute resolution short of an armed duel.

To offer that Ron Paul is attempting to use government force to achieve his ends is irrelevant, to this extent: 1) He is acting in good faith to attempt to recover something that he believes rightly belongs to him (his property), and 2) that the only means to do this (after good-faith attempts with the other party have failed) is to use the court system – which by definition is a government court system.

If the court of competent jurisdiction happens to be housed within the UN, then where else should he go?  It isn’t by Ron Paul’s doing that the federal government gave up this jurisdiction – therefore to complain that the action is taken in the UN is irrelevant.  If he goes to a US court, they would say it is out of their hands – go to the UN!

I have no idea about jurisdiction here, although in reading the complaint it seems that it is through this UN-housed entity where such complaints are adjudicated. 

So here is where I am at the moment:

1)      It seems Ron Paul believes he is attempting to recover something that rightly belongs to him.  On this planet, there is only one Ron Paul that matters in the public eye.  It is difficult for me to understand how the name “Ron Paul” does not belong to the well-known “Ron Paul.”  If I started a blog “Lew Rockwell Dot Org,” it would seem appropriate that Mr. Rockwell would be justified in his attempts to reclaim his name.
2)      I can only assume that good-faith attempts were made to negotiate and resolve this dispute.  I have read some of what has become public on this.  It is not enough to determine (nor, in any case, is anyone not directly privy to all of the details of the discussions able to determine) the extent of efforts made to resolve this privately.
3)      In every society – including a libertarian society – there is and would be some means of non-violent dispute resolution.  That we currently live in a society where the state provides this service should not preclude a libertarian from using these means if necessary.
4)      This leads to filing the case in a court of competent jurisdiction.  It certainly isn’t Ron Paul’s doing if that court happens to be within the UN.

I am open to understanding and considering much more on this topic, even to views completely counter to mine - but please at least address these in the terms I have outlined.  The entire issue is one that must be flushed out.  If anyone can shed light on the adjudication process if someone wants to challenge the ownership of a domain name, this would be helpful.  Where is jurisdiction?  What is the process? 

But from what I currently understand and what is currently public, it seems to me that there is nothing inappropriate in Ron Paul’s action.

Friday, February 8, 2013

Towards Consensual Governance

This is the title of the final chapter of Fred Folvary’s book, “Public Goods and Private Communities.”  I have covered the basic aspects of his theories here and here.  In this post, I will outline his summary and offer some closing thoughts of my own regarding this idea.

As mentioned in my previous post, Foldvary offers several case studies that demonstrate aspects of the possibility of private provision of public services.  No one example offers a complete picture – each example offers a reality of one or a few aspects of the theory. 

One point that he mentioned in several of the case studies was that, in order for people to implement their version of private community, existing regulations had to be swept aside in some manner.  It was the government sector’s rules that ensured the monopoly of the government sector. 

The example of Walt Disney World [WDW] in Orlando is illustrative:

Having obtained the land, Disney now needed self-government to fulfill his vision for WDW as a proprietary community.  On 15 November, 1965, Disney representatives met government officials at Orlando to discuss zoning and other laws, Disney’s commitment being contingent on reaching an agreement…. The circuit court approved the request for a separate drainage district….

The Reedy Creek Drainage District (RCDD) was formed in May 1966 under Chapter 298 of the Florida code…enabling WDW as landowner to control the environment and construction…. In 1967, Florida enacted Chapter 67-764 (House Bill No. 486) for the benefit of the Walt Disney Corporation…. The new law…‘abrogated nearly all state laws’ concerning building and development.

Foldvary suggests that the rules of the game must be changed.  He cites Buchanan, suggesting that changes below the (small “c”) constitutional level (whether this consists of electing better politicians or changing the laws) will be inadequate, because these will be “thwarted by the incentives that lead to dysfunctional outcomes.”

Such constitutional rules include: (1) those which prescribe the governance structure, (2) those which prescribe the behavior of the members, and (3) those which prescribe the powers of the organization.

Constitutional reform begins with an awareness of the meta-constitution, the ethical framework in which the constitution itself is created.  This ethical basis cannot itself be an agreement, since it sets the foundation for agreements.  This ethic was derived in Chapter 5 as what Locke called a ‘law of nature’, based on the premises of human independence and equality.  Such a fundamental change is not impossible.  Historical examples abound, including the American revolution and movements such as the abolition of slavery and equal rights for women.

Foldvary recognizes that the ethics of the people must be addressed if fundamental change, in the form of three amendments to a constitution, is to be enacted.  He looks to Locke for the basis:

The first, regarding the behavior of the citizenry, could be the codification of the Lockeian universal ethic: Any act which does not coercively harm others shall not be restricted, any state interest notwithstanding.

The second fundamental amendment regards the power of the state:

It would eliminate the taxation of individuals and firms by all levels of government, eliminating the mining of private wealth.

Foldvary goes on to describe the necessity of individual secession as the ultimate check on a government not following the rules, moving on to a third structural reform:

…one that would permit entry and exit into the government business itself, underpricing the cartel.  It would permit any person or organization having a title to land to withdraw the site from any government jurisdiction and create its own governance….an exit option helps maintain the post-constitutional enforcement of constitutional rules.

Foldvary concludes:

The theory presented in Chapters 1 to 8 presents the proposition that territorial public goods generate rents, and, if an organization has ownership rights to the sites on which rents arise, the rents reveal the demand for the goods and provide the means to pay for them.

The primary hypothesis – that incentives for personal gain do not in general induce private agents to provide the public goods that the people in the service domain effectively demand, because there is no way to induce individual users to each pay for a portion of the good – has been rejected…. Since the issue is the feasibility of private provision, the existence of the case study communities is sufficient to reject the hypothesis of market failure.

It seems to me that Foldvary has done a very good service with this idea as represented in this book.  He takes the best feature of the system of land value tax as proposed by Henry George, while eliminating the worst (i.e. where land should be common property), thereby developing it into a fully voluntary possibility, one that can be disciplined by the market.

Ultimately, the payment by the landowner is directly tied to that item that most directly benefits from community goods – the land.  Good streets, lighting, recreational facilities, security, etc.  Several such cooperatives can contract together for other services – broader security issues, for example.

Foldvary’s concept ties incentive for the entity providing the services to meet market desires at prices that offer value to the customers.  It offers the possibility for dissatisfied customers to withdraw consent – by not paying for services, joining a different cooperative, or moving without an exit liability and without requiring permission.

It allows for community pressure to be used as the means to motivate non-payers and free-riders to pay.  Not force, but peer-pressure. 

Folvary’s work deserves wider discussion and dissemination within the dialogue of the free-market, libertarian community.  I hope to have done my small part in this.