by William B. Fox
Last updated
3 July 2007

[Note: The editorial views expressed in this series do not necessarily reflect those of any authors' works, web links, or organizations listed with America First Books]

Part 2 of 4 parts

Note: In this section we examine the arguments for both centralization and decentralization that comprise the "Y" axis of the model discussed in the Introduction, Part 1 of this series. I depict the diagram of the model again below:

The diagram above should also include a "z" axis sloping backwards as in a perspective drawing to create a cube effect, entailing the "altruist/mutualist" vs "predator/parasite" (or "mutualism" vs. "parasitism" for short) duality of sociobiology.

A recapitulation of my definition of "top down vs. bottom up" from the Introduction section:

Looking first at our "y" axis, the term "centralization" usually means "more top down." It also has a loose association with a whole garden variety of interesting terms, such as "central planning," "headquarters-directed," "authoritarian," "autocratic," "conglomerated," "corporatized," "regimented," "militarized," "caesarism," "imperialist," and "fascistic."

In regard to social behavior, I even see some linkages with terms such as "Big Brother," "alpha male control freak baboon," and "egomaniac" for people on the top, and "theory `x' externally-directed personalities" and "servile" for people on the bottom.

On the other end of this management science dualilty, "decentralized" tends to mean "more bottom up." It also has loose but significant associations with its own garden patch of interesting popular terms, such as "libertarian," "entrepreneur," "sole proprietor," "individual initiative," "freedom,""democratic," "independence," "secession," and "insubordination."

In regard to social behavior, I see linkages with terms such as "self-actualizer," "innovator," "rugged individualist," and "theory `y' internally directed personalities." In regard to economics literature, I see linkages with terms such as "free market," "laissez faire," "Austrian economics," "entrepreneurial infrastructure," "task organization," "matrix management," "spontaneous order" (latter term courtesy of nobel laureate Friedrich Hayek), and "close to the customer," "productivity through people," "hands-on, value-driven," and "simple form, lean staff" (courtesy of In Search of Excellence authors Thomas Peters and Robert Waterman).

 

Overview

Before we can intelligently discuss any political or economic ideologies, we need to first become consciously aware of the main arguments for both centralization and decentralization.

This is part of an ongoing debate in management science. Typically the "school solution" is that there is usually no one right answer regarding which approach is better for an organization. It is usually not a question of whether a group should be completely centralized or totally decentralized, but rather the best answer typically involves some combination of the two. Furthermore, the right mix is usually situation-specific and dependant upon many variables. The right mix can also change over time as an organization grows and meets new challenges.

It is interesting how one can find examples of "decentralization" even within the context of what appear to be highly regimented, hierarchical, military behemoths. I can think of at least three examples, as follows:

1). The U.S. military recognizes the need for decentralized decision-making with its "task organization" concept, whereby lower level commanders are expected to reconfigure their force structures to adapt to new environments. For example, an infantry commander moving through swamp terrain may need to divest his tanks and add specialty forms of man-portable firepower, whereas another commander moving through a desert may wish to attach additional armored and close air support units.

2). The book Pork Chop Hill talks about Chinese Communist leaders during the Korean War who were "democratic to the point of recklessness" by sharing vital secrets down to the rifle squad level. Americans theorized that Chinese troops got a "good feeling" from knowing secrets and that this helped them think that a battle plan was the best possible one.

3). Military analyst William Lind describes forms of encouraged insubordination within Adolf Hitler's armed forces in his article "ON WAR # 12:"

...A Third Generation military focuses outward, on the situation, the enemy, and the result the situation requires, not inward on process and method (in war games in the 19th Century, German junior officers were routinely given problems that could only be solved by disobeying orders). Orders themselves specify the result to be achieved, but never the method ("Auftragstaktik"). Initiative is more important than obedience (mistakes are tolerated, so long as they come from too much initiative rather than too little), and it all depends on self-discipline, not imposed discipline. The Kaiserheer and the Wehrmacht could put on great parades, but in reality they had broken with the culture of order.

William S. Lind makes a similar point regarding the British Royal Navy in his April 10, 2007 article "Horatio Hornblower's Worst Nightmare." (part of his On War series, #213). Lind comments

. . .In the latter half of the 18th century, the Royal Navy developed and institutionalized what we now call maneuver warfare or Third Generation war. By the Napoleonic Wars, it was all there -- the outward focus, where results counted for more than following orders or the Fighting Instructions; de-centralization (Nelson was a master of mission-type orders); prizing initiative above obedience; and dependence on self-discipline (at least at the level of ship commanders and admirals) . It is often personified as the "Nelson Touch," but it typified a whole generation of officers, not just Nelson. In the 19th century, the Royal Navy lost it all and went rigid again, for reasons described in a wonderful book, Andrew Gordon's The Rules of the Game. But Hornblower's and Aubrey's navy was as fast-acting, fluid and flexible at sea as was the Kaiserheer on land.

When it comes to addressing centralization vs. decentralization political issues in America today, we can observe some amazing anomalies. During both the Cold War era and the current so-called "War on Terror," most Federal politicians have taken big government for granted. During this same period, most state-funded universities have emphasized macro-economic theory that also takes for granted central bank manipulation of money, markets, and credit and massive big government intervention in the economy.

Conversely, any really serious political decentralization arguments are treated like something whispered behind the woodshed. This is particularly true when they entail terms such as "secessionism," "white separatism," "hard money," or any really serious move back towards "State's Rights."

The idea of disbanding our central bank and taking the control of money and credit out of the hands of politicians and private central bankers and instead tying these things to gold and silver is typically pooh-poohed by national media financial writers as "kooky," despite the fact that maintaining a gold and silver standard comprised the dominant political platform of 19th century America populism and Jacksonian Democracy. I have never even heard of a nationally prominent politician call for a full-scale public audit of the privately-owned Federal Reserve Banking System, even though this has never been done and makes a lot of sense to responsible citizens.

Nor have I ever heard a nationally prominent politician seriously advocate the "dual sovereignty" or the "true federalism" concept, whereby the Federal Government must always be kept weaker than the States. This implies that States have their own right to interpret and nullify Federal directives which are unauthorized by the Constitution in order to defend their own sovereignty— as well as liberty for the general public. This concept was the central plank of Thomas Jefferson and James Madison in their Kentucky and Virginia Resolutions of 1798, not to mention the writings of anti-Federalist leaders such as Patrick Henry and George Mason.

Unfortunately America's centralization vs. decentralization political debate was never finally settled on a dispassionate intellectual level. Nor was it ever settled with the best long term interests of most Americans in mind. Rather, it was "settled " through the catastrophic battlefield slaughter of the War Between the States, which left over 640,000 America's finest dead and over half the South in total ruins.

All of this was subsequently used by special interests to somehow justify to later generations of Americans their spin doctoring of the "King Lincoln" dictatorship. Since then we have witnessed a relentless trend not only towards a more perfect union, but also more perfect big Federal government, more perfect social re-engineering at home, more perfect foreign adventures abroad, and more perfectly burdensome taxes and inflation.

The centralization vs. decentralization debate was also "settled" somewhere between the Robber Baron Age and the onset of America's intervention in World War I, when plutocratic intriguers moved in like sharks to exploit the weeping wounds of the fractured republic in order to lock in monopolistic special privileges for their own narrow special interests. This included creating a privately controlled central bank and imposing an income tax in 1913 to help finance their global ambitions. (Please refer to my detailed discussion of Special Privilege: How the Monetary Elite Benefit at Your Expense by Vincent Locascio near the end of this article).

In other words, the War Between the States undermined America's immune system. The country became deeply infected with an alien elite who has thwarted with "viral persistency" every serious effort in the last one hundred years to move America back towards real decentralization, to include genuine forms of popular sovereignty on a localized level (discussed further in my "genetic bottom up" section). Instead, America's elite has used its financial and media control to continually move America in the exact opposite direction towards ever more centrism, more taxes, more liberal media censorship, and ever bigger government. Coinciding with this agenda we have also experienced ever more anti-national internationalism, anti-white multiracialism, anti-Western multiculturalism, anti-Arab pro-Zionism, and many other hideous creatures of the New World Order.

Fortunately there remains at least one vital area where America has remained relatively unmolested on an ideological level. This involves small to medium-sized businesses functioning within a free enterprise system, particularly in America's heartland. It is truly amazing how organizational theory in this realm seems to be in a completely separate universe compared to what we hear from our big brothers in Washington, D.C., as well as our media masters and central bankers in other places such as New York City and Los Angeles.

Having it both ways on Wall Street

One of the most interesting live forums in America regarding centralization vs. decentralization issues involve the mergers and acquisitions departments of Wall Street investment banking firms. A major reason is that these firms can make big money handling transactions that favor both viewpoints. They tend to function more like business brokers in the heartland than the central bankers I alluded to earlier. Indeed, many investment banking firms are regional entities located outside of 20th century monopoly centers such as New York City, Washington, D.C., and Los Angeles.

Interestingly enough, arguments in this realm tend to be equally balanced for both centralization and decentralization. I think it is worthwhile to first examine this Wall Street world, and then make some analogies with the political sphere. The results can be both surprising and illuminating.

When it come to "top down" or centralization arguments, investment banking firms can earn hefty advisory fees promoting mergers and acquisitions that enable established companies to join together to form bigger, more centralized entities. Wall Street brokers also promote secondary stock offerings that enable established companies to raise funds and grow that much bigger.

When it comes to the "bottom up" or decentralization arguments, investment banking firms can also earn juicy underwriting fees promoting initial public offerings (IPO's). These offerings raise capital for relatively new companies, whose growth and development generally increase competition among established companies within particular industries. Initial public offerings also raise capital for companies that get spun off from larger parent companies. (This, incidentally, is the corporate analog of political "secessionism" and "separatism"). All of this tends to increase competition and undermine forms of monopoly while supporting new sources of innovation.

Most investment bankers and stock brokers get pretty good at telling investment stories that favor both centralization and decentralization. In fact, most are talented at flip-flopping back and forth between the two sides when the right opportunities present themselves. While it is true that on Wall Street one can usually find both types of activity going on at any one time, one commonly finds particular investment professionals running fads and trends. They tend to take one side of the story and milk it to death, and then take the other story and run that for a while, and then back and forth and back and forth.

As a former full time stock broker, let me share with you some sample phone-sale pitches for the "centralization" story, and then try to make a national political analogy. For the sake of intellectual completeness, I have also added some sleazy reasons that are quite significant, but are typically not discussed, or at least not over the phone with strangers.

Achieve greater economies of scale: When several companies combine, they can eliminate redundancies in headquarters staff and systems and cut costs. They can combine product lines and manufacturing resources to achieve longer production runs, reduce relative set-up time, and achieve other cost efficiencies. Large companies can also take proven methods and implement them cookie-cooker fashion on a broad scale.

On a national political level, when a country grows in terms of population size and territory, it can usually become more self-sufficient in terms of enjoying a vast internal market as well as hosting integrated industries less dependent on foreign trade. This makes a country less vulnerable to foreign boycotts and other intimidation measures.

Significantly, achieving economies of scale should be an argument for a reduction in government relative to GDP as a country grows. For example, as America grew in the early 1800's, government remained under 5% of GDP right up until the "King Lincoln" dictatorship.

Despite efforts in the late 1800's to roll back a big jump in Fed size during the War for Southern Independence, the Federal fungus resumed an irrevocable growth trend following the creation of the Federal Reserve Banking System in 1913 and America's entry into World War I in 1917. Today total Federal and State government stand at over 40% of GDP.

In looking back over the 20th century, it is more accurate to talk about "negative" economies of scale with government growth. I might also observe that one frequently sees negative economies of scale (ie. reduced efficiency) among large corporations once their management teams achieve certain levels of corruption and cronyism. I talk more about corrupt "imperial conglomerates" in Part Four of my "I, Robot Entrepreneur" series, where greater size serves as a smokescreen for more self-dealing rather than as a tool for greater efficiency. Quite often big corporate cultures become more concerned with milking their product lines and manipulating appearances rather than remaining focused on continually innovating and manufacturing useful things for consumers, and in this kind of climate crooked people start rising to the top.

Increase the absolute top and bottom line: A bigger company tends to have greater revenues and profits. Greater financial strength can be used to attract the best talent, acquire the best plant and equipment, and access other important resources. It can also give a few highly competent leaders the ability to decisively mobilize massive resources more quickly that the competition. They may also have the financial strength to decisively undercut certain competitors.

On a national political level, a bigger country can generally afford a bigger army to bully or gobble up smaller rivals. It can afford to create more monuments and infrastructure to add to its legitimacy.

However, as Dr. Elmer Pendell observes in Why Civilizations Self-Destruct, the underlying quality of the population may be deteriorating as the physical manifestations of a civilization are reaching their height.

"Synergy:" Merged companies can spread brand name recognition and marketing expertise from its core company products over the product lines of newly acquired companies, thereby leveraging its distribution channels.

On a national political level, an empire can leverage itself by absorbing lower quality peoples than its founding stock to gain access to greater manpower and cheaper labor. An empire usually tries to hide the fact that it may be diluting itself while it is growing. One technique to divert attention is to create public displays of imperial strength.

Risk reduction: A bigger company can reduce its overall risk of going bankrupt by having many different product lines spread across different industry segments. If one area fails, cash flow from healthier areas can serve as a cash cow to sustain overall operations elsewhere.

National political level: Smaller countries often try to reduce their vulnerability to attack by forming military alliances with neighbors. Their ruling elite may also try to diversify economically by forming partnerships with foreign companies.

Enhance prestige: By becoming bigger, a company can appear more "world class" to attract more favorable financial terms and negotiate from a greater position of strength. The fact that that a company is growing rapidly by making acquisitions can give it the appearance of being a "star," and hence cause the public to be more likely to treat it like a star, even if the "excellence" of the underlying company has more to do with public affairs trickery than reality.

National political level: America's self-anointed leaders have been playing a desperate game to preserve global dollar hegemony and bolster American prestige as our manufacturing base and corresponding economy have been deteriorating out from under us over the last few decades (see my Critical Issues section). One example of smoke and mirrors games include the rapid growth in the use of dangerous derivatives to cover for the delinkage of the dollar from gold following a massive loss in the U.S. gold supply in the 1960's. Two other examples include the use of 9-11 to deflect attention from domestic problems while seizing oil fields in the Middle East and hobbling enemies of Israel, and the national media censorship of the social strife created by massive illegal Third World immigration that undermine the long term cohesion, tone, and innovative capabilities of America's declining white majority.

Another good example of a political prestige game played on a military level took place during World War II. Adolf Hitler lost an entire army at Stalingrad for fear that if he allowed it to retreat to save itself from encirclement, this would irreparably damage an image of inevitable victory for his armed forces.

Increase psychic sensations of power, structure, and control: Many leaders are addicted to power accumulation regardless of the social consequences to others. Many thrive on intrigue. Quite a few corporate chieftains have authoritarian personalities and love to lord it over others. Conversely, on the "follower" side of the equation, quite a few people have a strong emotional need for the "security blanket" of organizations that offer structure, a steady paycheck, and symbols of authority and control.

The perpetual quest to make big companies ever bigger gratifies all of these types of people as an end in itself, regardless of whether or not growth makes sense from the viewpoint of shareholder interests, organizational efficiency, or maintaining innovativeness.

National political analogy: The True Believer by Eric Hoffer describes personalities with a strong emotional need to fanatically lose themselves in ideological quests. Many of these kinds of people also have fetishes for the power symbols of state authority ("statism").

And to imagine, were it not for some hanging chads in 2000, and 2004 election irregularities (dare we even say "skullduggery?") we might have been deprived of our Messianic Boy Emperor.

Because of America's republican traditions, our fascist symbols are usually not quite as obvious as the opulent palaces and triumphant arches in Europe. However, I would nominate as one candidate the imperial entourage of Our Leader that was so vast, paranoid, and overbearing that it greatly overtaxed Londoners and thoroughly angered the Queen of England at Buckingham Palace in November 2003.

Exploring a deeper dark side to centralization

Please be aware that in the real world, the merger story is actually much weaker than it generally appears to the public. "When to Ally and When to Acquire" by Jeffrey H. Dyer, Prashant Kale, and Harbir Singh in the July-August 2004 Harvard Business Review explains the problem:

At the core of your company’s strategy lies a dilemma, wrapped in a problem, inside a challenge. As companies find it increasingly tougher to achieve and sustain growth, they have placed their faith in acquisitions and alliances to boost sales, profits, and, importantly, stock prices. That’s most evident in developed countries. American companies, for instance, created a titanic acquisitions and alliances wave by announcing 74,000 acquisitions and 57,000 alliances from 1996 through 2001. During those six years, CEOs signed, roughly, an acquisition and a partnership every hour each day and drove up the acquisitions’ combined value to $12 trillion...

There’s a problem, however, and it refuses to go away. Most acquisitions and alliances fail. A few may succeed, but acquisitions, on average, either destroy or don’t add shareholder value, and alliances typically create very little wealth for shareholders. Companies’ share prices fall by between 0.34% and 1% in the ten days after they announce acquisitions, according to three recent studies in the Strategic Management Journal. (The target companies’ stock prices rise by 30%, on average, implying that their shareholders take home most of the value.) Unlike wines, acquisitions don’t get better over time. Acquiring firms experience a wealth loss of 10% over five years after the merger completion, according to a study in the Journal of Finance. To add to CEOs’ woes, research suggests that 40% to 55% of alliances break down prematurely and inflict financial damage on both partners. When we analyzed 1,592 alliances that 200 U.S. companies had formed between 1993 and 1997, we too found that 48% ended in failure in less than 24 months. There’s plenty of evidence: Be it the DaimlerChrysler merger or the Disney and Pixar alliance, collaborations often make headlines for the wrong reasons. Clearly, companies still don’t cope very well with either acquisitions or alliances.

There is an interesting lesson here in regard to centralization vs. decentralization issues. I believe that most mergers fail because they are driven by "top down" greed factors that emphasize financial engineering. Relatively little attention is paid to "bottom up" factors such as developing better products and creating a climate of mutual trust and a shared sense of ownership and purpose among co-workers.

In the long run we seem to always return to character issues. As an example, in Part Four of my series about the mobile robot industry I talk about the unique success that Cisco Systems CEO John Chambers has had in building his company through acquisitions:

Howard Charney, who founded 3Com before it was acquired by Cisco, commented “There are lots of people working here who could be running their own companies — who were running their own companies. John treats us like peers. If he treated us like employees we'd be out of here.” According to Chambers, “A large part of our business is based upon trust and working together. Nothing changes behavior like survival.” It’s no longer the big that beats the small, but the fast that beats the slow.” “You want to beat your competition, but you want everyone to win.” Chambers insists on staying extremely close to the market. He said, “At IBM and Wang [where Chambers worked before taking over Cisco], we fell in love with technologies and paid a terrible price.”

Jim Clark, who has founded three Silicon Valley companies with market caps over $1 billion, has echoed John Chambers, “A leader must always strive to get the very, very best people — people who threaten you because they’re smarter than you. You also have to make sure you don’t have high turnover. I have a rule: Never lose the first good person.”

This approach is all well and good, but it typically requires leadership skills, emotional maturity, a long term time horizon, and a sense of caretakership towards American society.

In contrast, the financial engineering game is very seductive because it provides a relatively quick and easy route to big bucks. The reader might find it instructive for me to detail how the game works, as discussed below:

First, a company tries to get a relatively high P/E multiple to its stock by keeping up appearances and figuring out hot growth stories that will resonate with the public. It may even hire public relations firms to hype its story to stockbrokers and the general public.

Once its stock is up, the management starts going on a hunting spree to acquire companies with relatively low price to earning multiples, but whose corporate story can somehow be spin-doctored to sound like part of an intelligent acquisition strategy.

This tactic alone can serve as a hat trick to convert a fluff company into one with real cash flow while defrauding the public. When an entrepreneur with a fluff story can parlay his overvalued stock to acquire control of a company with real earnings, now he has acquired a source of real cash flow to sustain operations. Conversely, if he fails to parlay his fluff stock, his company might eventually implode in bankruptcy. Some extreme examples of all of this took place in the late 1990's, when start-up Internet and Telecom companies with no earnings and stratospheric stock prices started to parlay their stocks for ownership in real "brick and mortar" businesses with real earnings. As one example, the AOL merger with Time-Warner drew heavy criticism for looking like an emergency duck for cover as the Internet story began to fray at the edges.

Usually companies with low P/E multiples have slower growth potential. When a company with a "hot growth" story and a high P/E multiple acquires slow growth companies with low P/E multiples, the overall stock P/E multiple should drop, and the stock price should languish as well.

But this is usually not what happens. Instead, the acquiring company usually achieves a "financially engineered" boost to its earnings. One reason for this is that Wall Street analysts have a tendency to stay with hot growth stories that justify high P/E multiples. They are reluctant to alienate companies who might become good clients for the mergers and acquisitions departments of their firms. This in turn enables acquiring companies to continue using their overpriced stocks to buy companies with undervalued stocks and "cheap" earning. All of this in turn continues to steadily increase the earnings reported on income statements, even though the earnings growth is purchased with the overpriced stock offered in acquisition deals, and hence is "financial engineered" rather than reflecting increased sales of real and useful products.

The public never seems to learn. Part of the reason is that quite a few investors simply do not care. Much of Wall Street is driven by hot speculative investors who could care less about fundamentals as long as they can eventually offload their overpriced stock on greater fools.

The game usually continues until management can no longer hide serious underlying problems. Until this fateful day, insiders continue to acquire more stock options and keep carving out ever higher salaries from their growing revenue and asset base. Before reality intrudes, they and their friends on Wall Street hope they can find ways to convert major portions of their holdings into cash in the bank.

Then comes the news announcement that breaks the golden growth story. The stock crashes. The management holds a press conference where it blames the problems on everything except themselves. After the phony contrition, management affects confidence in its bold new "turnaround" plan. Then Wall Street analysts eventually return to curry more favor by selling the "turnaround story" to the public. Even turnaround companies can bring good business to their corporate finance departments.

A big problem with this game is that no real wealth or productivity gains are being created for American society. It is all about leveraging prestige, shuffling paper, and milking public credulity rather than steadily innovating and producing real products that offer a genuine "value proposition" to the public.

We can compare all of this with the approach of 19th century industrialists such as Henry Ford and Thomas Edison who focused upon improving technology, automation, and the quality of products. They took great pride in converting a share of their steadily increasing productivity into steadily rising real wages for American workers. I discuss Henry Ford's approach further in my Preface to My Life and Work. This book reflects the kinds of values that once built America.

Incidentally, I do not mean to imply that these earlier American leaders did not occasionally cut some corners or run into significant problems. Thomas Edison told his investors that he had already invented the light bulb in order to raise the money he needed before he went ahead and invented it. He also got into a nasty fight with another genius named Nikola Tesla when Tesla was right about superiority of AC current systems in electrifying America compared to Edison's DC approach. In regard to Henry Ford, he went bankrupt with his first company before he founded the Ford Motor Company and subsequently became one of the wealthiest men in America.

Despite all their problems and imperfections, these kinds of men were still giants compared to American business leaders today who are at least a quantum level down the totem pole in their ability to deliver on their promises and serve America's interests while helping themselves.

"Natural" vs "Dictated" Politics

"The greater the state, the more wrong and cruel its patriotism, and the greater is the sum of suffering upon which its power is founded." – Leo Tolstoy

"The State is the great fiction through which everybody endeavors to live at the expense of everybody else." Frederic Bastiat

There is an interesting tie-in between the concept of "natural" and the term "decentralization." Similarly, we can associate "dictated" with the term "centralization."

Later in this article I will explain how this "natural" vs. "dictated" conceptual dichotomy applies to our analysis of monetary systems, economics, and religion.

First let me explain what I mean by "natural." Things that are "natural" tend to spontaneously and informally evolve on a grass roots level and stand the test of time over many generations. It tends to have an informal and familial flavor to it that involves direct personal contact, leadership by personal example, and an emphasis on voluntary cooperation.

In contrast, things that are "dictated" often involve a select few people at the highest levels of power who like to use force, deception, and various props of power to serve their own selfish interests and bend people away what they would ordinarily do for themselves under "natural" circumstances.

In my mutualism vs. parasitism discussion, I describe how one can often discern vague elements of "democracy" (ie. a system designed to utilize constructive suggestions from many sources to make policy decisions) and "republicanism" (a system designed to prevent arbitrary and irrational rule) in small village settings of tribal societies around the world.

This is because in a small village where everyone knows everyone else pretty well, it is fairly easy for representative people to get together in a large room and informally hash out their complaints and concerns. Village gossip also provides a constraint on bad behavior as well as an important way to keep people informed on what is really going on. It is also much easier to settle grievances in a one-to-one manner with anyone within a small village. A small village is generally a much more informal and "natural" environment than a political or economic power center in a big city. Lastly, villages tend to be racially and ethnically homogeneous. Local customs and traditions are usually adequate to ensure good behaivor without having to resort to police state strong arm tactics. Within such a village one can also have the feeling of an extended family. The people in charge are more likely to have a geniune sense of long term caretakership and a strongly felt emotional sentiment for the welfare of everyone else.

In contrast, once we scale up to the level of a territory that encompasses vast numbers of villages, the common people are usually not able to meet with their rulers face to face, know what is really going on, or settle scores with the people in power. The rulers can hide behind professional propagandists, bureaucrats, military strong-arm men, and ritualistic protocols. It is much easier for rulers to find ways to abuse their power to serve their selfish ends and then cover up their misdeeds before the public. Lastly, it is fairly common for the people who control large nations or empires to have very little common on a racial or ethnic level with most of the underlying population, and therefore have very little emotional investment in looking out for their long term welfare. Worse yet, the power game tends to attract psychopathic personalities who are indeed more cold-bloodedly "unnatural" and sinisterly manipulative than the common man.

Here, we see how as government grows and encompasses more villages and becomes vastly larger and more pyramidal in structure, it tends to become much more formal, arbitrary, dictatorial --and vastly more "unnatural." It is fairly common everywhere you go around the world to hear the man on the street complain that the politicians on a national level frequently seem to act like clowns or evil characteritures of their own people, far removed from their concerns.

Three fairly dramatic examples come immediately to mind. The democratic flavor of the small Russian village councils (or "soviets") was completely turned on its head under the brutal "Soviet" dictatorships of Lenin, Trotsky, and Stalin. The nationally televised "town hall meetings" conducted by recent U.S. Government administrations are a complete farce compared to town hall meetings that were once held in small towns in early America. In its actual policies, the Bush regime slavishly follows the will of the Jewish lobby and other special interests while thumbing its nose at the will of the majority of Americans. Among other things, the majority of Americans oppose open borders with Mexico and want immediate withdrawal from Iraq. Lastly, Israel is effectively run as an authoritarian secret police state by the Mossad. It starts wars and promulgates international intrigues at its own pleasure. Certain observers believe that it even murders its own people such as former Prime Minister Yitzhak Rabin in internal gangster turf battles. It also tries to kill U.S. Presidents. (Please see details regarding Rabin, JFK, and reported attempts on Harry Truman and George H. W. Bush in Michael Collins Piper's Final Judgment). All of this has very little to do with a sense of broad-based group concensus, familial give-and-take, and a sense of humanity that Israelis would tend to more closely associate with life on a kibbutz or many Jewish idealists associated with the founding of the Jewish state.

The "natural" politics concept has tie-ins with many "thought problem" paradigms created by famous political and economic theorists. For example, the French philosopher Jean Jacques Rousseau talked man in the "state of nature." The basic idea is that when people accept a government over them, they engage in a "social contract" whereby they expect the benefits of such a government to compensate for the rights and taxes that they give up. A government should certainly offer them something better than what they had in a "state of nature" with no central government at all.

In "Austrian" or "laissez faire" economics, libertarian theorists such as the late Dr. Murray Rothbard like to start out with "Robinson Crusoe" thought problems, and then build their economic theory upwards from this grass roots level. Austrian economists like to show how as one adds more government, one typically adds more layers of "special privilege" which in turn tends to create layers of economic distortion, disinformation, and dysfunction compared to a pure, laissez faire free enterprise economy.

In his lectures on the evolution of classical liberalism, Dr. Ralph Raico has discussed how French libertarian economists of the 18th and 19th centuries associated entrepreneurs, craftsmen, farmers, and industrialists with the "wealth-creating," "tax-producing," and "productive" classes, and conversely associated central government, a standing military, and idle monks with the "tax-eating," "wealth-consuming," and essentially "nonproductive" classes. According to Dr. Raico, certain libertarian economists condemned industrialists as corrupt and nonproductive once they crossed the line and started to depend on forms of government subsidy. In libertarian theory, government is based on force, coercion, and politics. Rather than protect the citizenry, over time it tends to grow on its own accord like a cancer and infringe on private property rights and systems of voluntary exchange that tend to exist on a more natural level.

One problem with the "state of nature" analysis offered by most modern liberals is that they tend to overly generalize. We know from vast volumes of anthropological field research that the "state of nature" varies widely around the planet for different peoples based on racial, cultural, historical, and physical environmental factors. At one extreme, the relatively homogeneous, traditional (or "folkish") Nordic-Celtic society of Iceland was once based on highly literate, economically self-sufficient, self-motivated family homestead units that functioned extremely well for centuries with almost no central government by contemporary American standards. The central government in the Middle Ages consisted of relatively informal meetings held on Parliament Plains (Thingvellir) once a year. At the other extreme, in other parts of the world we can find various peoples who can barely even function as low-level savages. They run around naked, eat each other, tend to be lazy, routinely lie to each other, have almost no sense of personal property rights, and otherwise tend to act like morons in the absence of all-powerful, cruel tribal chieftains forever looking over their shoulders.

Appearance manipulation vs. the grass roots in the higher political sphere

As mentioned previously, when a government acquires more territory, it can usually collect more taxes, sustain a larger military, and pay higher salaries and perks for government executives. It can also afford to erect more monuments to itself and create other prestigious symbols that enhance an appearance of legitimacy, giving it more leverage with jingoist patriots at home and toadies abroad.

When a government expends too many resources playing the prestige game, that can be a bad sign that insiders are more interested in building their own power base using leveraging techniques than in genuinely serving the people.

I think that we need to distinguish between the often laborious but honest long term-oriented grass roots methods used by honest populist politicians to build solid political constituencies — and represent their interests — and the largely dishonest short cuts unfortunately used by most politicians in America today.

Using a business analogy, the honest way to build a business is to invest considerable time and effort towards developing an original business plan that offers a solid "value proposition" for a viable market. The execution phase of the business plan may also entail considerable time effort involving everything from perfecting production of the actual product to fine-tuning all the functional areas of the organization.

The laborious but honest way to create a political constituency is build it on the grass roots level. This can mean going door-to-door as well as networking with influential people and organizations in ones local community. When people are ignorant about tough issues, the honest politician tries to educate them rather than hide from these issues. This entire process may require far more work than a particular campaign season prior to an election. In fact, an aspiring office holder may require many years to build the necessary support base.

I think that Dr. David Duke's book My Awakening provides an extreme example of someone who fought a long and ultimately successful uphill battle against America's prevailing national media and political establishment to build a solid grass roots support base within his districts in Louisiana.

As one of the most heavily demonized individuals in America on account of his blunt criticism of Jewish supremacism and U.S. Government racial policies, Dr. Duke faced vicious opposition. The very hostile national media included the Jewish-owned Times-Picayune of New Orleans. As Dr. Duke observed in his book, the controlled media routinely attacks any whites who dare to defend their own genetic interests, although it has always pursued the exact opposite policy towards Jews and Israel. Despite the smear campaigns, Dr. Duke was elected Louisiana State Representative in 1989. Even pre-election polling failed to predict his upset election success, causing Dr. Duke to quip "I fly below radar."

Similarly, the British National Party has been scoring successes at the grass roots level despite hostile national media and strong opposition from the current British political establishment. The same holds true for the National Front in France. Like the David Duke campaigns, these are not "normal" election campaigns. They require tremendous long term effort invested on a grass roots level to wake the electorate out of their racially suicidal apathy. Polls show that most whites oppose massive illegal immigration, but despite this their establishment leaders typically typically run roughshod over their sentiments.

As a disclaimer, I am providing these rightist examples from a broad ideological perspective. Behind the scenes, certain individuals from any part of the political spectrum may or may not measure up to the implied nobility of their public cause. This is a separate character issue that voters should investigate on their own.

Taking the short term path of least resistance

The short cut in the political process is for a politician to ingratiate himself with the media moguls and other big money people. Once they decide to use him, they will hire the PR professionals who figure out the best ways to "package" him. They will give him the air time he needs with just the right "spin" to win under "normal" election circumstances where most people are apathetic and do not spend much time learning the names of their elected officials, much less the issues they represent. If there is electronic voting, they may even "fix" that as well. In fact, there is considerable evidence that our last two presidential elections were fixed.

We know that about 50%-75% of the funding for the Democratic Party and somewhere over 25%-50% for the Republican Party has come from the Jewish lobby in recent decades. In They Dare to Speak Out, former Congressman Paul Findley talks about how all U.S. Presidential candidates get routinely interviewed by Jewish groups and must pass their kosher test to stay on the nomination tickets of both the Democratic and Republican parties.

Hence, once a politician goes down the road of becoming a bought candidate, he can forget about seriously criticizing Israel, AIPAC, the Mossad, or any other Jewish supremacist groups. He can also forget about criticizing various bloated Federal bureaucracies or getting the real truth out about 9-11, out of control Third World immigration, depleted uranium, or a host of other issues that I address in my Critical Issues section.

This is not to say that a bought politician will never be able to talk about any of these issues. However, if he decides to address them, he will always feel compelled consult with certain "handlers" to make sure his statements are spin-doctored in the right way if he wishes to remain in office.

In other words, he will always be "controlled opposition." When he addresses tough issues, it will usually be as a "limited hang-out," where he covers perhaps 70% of the truth, but leaves lies through omission with the remaining 30%.

At the 2005 European American Conference in New Orleans, Dr. Duke said that the Achilles Heel of the American political system from the standpoint of America's corrupt, ruling elite is the grass roots. As much money as they have — and they do have a lot — they still do not have enough money, manpower, and influence to buy the hearts and minds of folks on the local city and state government level in the face of highly persistent and determined grass roots organizers.

As another important note, I would point out that successful guerilla warfare practitioners throughout history have had to spend considerable time and energy engaged in grass roots political organization and education even while they are engaged in military operations. The requirement to do this never goes away. It is just that once an insurgency erupts, this process only becomes that much more dirty and dangerous. Therefore, individuals who read fictionalized accounts of future conflict in America and have fantasies that everything will get satisfactorily resolved at the point of a gun are sadly mistaken. While I strongly encourage citizen self-defense and staunchly support the right to keep and bear arms, I think that people who stock up on guns and ammo and do nothing else to address our growing social problems are a pathetic bunch.

No matter what happens, grass roots political organizing is the way to go. Better to successfully do it now under relatively peaceful conditions than to continually sweep hard issues under the rug and wait for social conditions to reach the boiling point. Mass social violence is a very ugly thing filled with tragic unintended consequences. No responsible person in their right mind would deliberately want to engage in violence while peaceful means remain an option — so get to work peacefully organizing and spreading the word now!

A Soviet story

In his book The Liberators: My Life in the Soviet Army, Viktor Suvorov presents one of the best anecdotal stories I have ever heard about how large bureaucracies and highly centralized political systems can become completely detached from reality. According to an Amazon Customer Review:

The author, Suvorov, entered the Soviet Army through unbelievable circumstances. The workers of chemical combines were ordered to transport huge quantities of fertilizer to make a record harvest for the glorious Ukraine SSR. However, the truck-drivers ordered to transport this fertilizer (one of whom being the author) were unable to meet the impossible 24 hour time quota! The men in charge of this operation had no idea how to deliver all this fertilizer, so they told the drivers to just get rid of it. The drivers dumped the chemical fertilizer into the river, creating a horrible yellow, stinking stain. Once returning to town after a day of dumping fertilizer into the Dnieper, Suvorov realized that he still had a ton and a half left in his tank. Without thinking, he dumped the cargo onto his private lot, completely destroying it. With the fear of starvation looming, Suvorov was forced to join the Tank School in Kiev, setting a series of tales of the sort into motion.

The decentralization story

After the Wall Street merger story gets milked to death, now it is time to reverse gears and pitch the decentralization story. Here are some key sales points, combined once again with some national political analogies:

Entrepreneurial companies tend to be much more innovative: Small companies are more likely to attract self-motivated people with visionary, flexible, innovative, decisive, and entrepreneurial personalities. In contrast, big corporations tend to become grazing grounds for risk-averse, politically-sensitive, bureaucratic personalities who prefer highly structured environments. In fact, it is very common for large natural resource companies to buy their mining discoveries and other natural resource properties from junior companies. One also frequently sees large technology companies buy most of their innovative new product lines from small entrepreneurial companies.

Recognizing that smaller companies tend to grow faster and be more innovative, sometimes big companies will deliberately spin-off pieces of themselves to form new companies centered around certain product lines. Officers of the parent companies often obtain shares in the new spin-off companies as an incentive to carry out the divestitures. The Thermo Electron companies, Tektronix, and Hewlett Packard are examples of companies that have been major sources of spin-offs. In the case of Thermo-Electron, systematically creating spin-offs has been a conscious feature of the business plan.

On a national political level, the innovative output per capita of the tiny Greek City states of the heroic and classical periods dwarfed the accomplishments the Greek Empire of Alexander's Ptolemaic successors or the Roman Empire at its height. The small northern Italian states of the Renaissance dwarfed the innovative output of the united Italy that came later. Tiny quasi-Odinist Iceland as a medieval offshoot of Norway dwarfed the literary and intellectual output of the rest of Christianized and consolidated Scandinavia. A few renegade colonies at the time of Thomas Jefferson and Benjamin Franklin dwarfed the innovative output per capita of the rest of the British Empire. Similarly the young American, Roman, Grecian, Swiss, Renaissance Italian, and Dutch republics seemed to foster a vastly greater level of innovative social and political thinking than their mature forms a couple of centuries later.

Some political spin off examples include the way Great Britain peacefully divested Canada, New Zealand, and Australia beginning in the late 19th century. Despite their greater autonomy, these "children" paid back dividends through favorable trade relations. They also provided troops during the World Wars.

Spin-offs and secessionism are by no means irrevocable; for example, Scotland has been both united and disunited back and forth with England many times. Norway has been both united and disunited with Denmark. Neither unification nor secessionism are necessarily things that are worth fighting bloody wars over one way or the other.

I personally believe that among whites, Nordic and Celtic peoples in particular have strong innate libertarian tendencies and function better in smaller countries than in big empires. Later in my libertarian racial nationalist discussion I delve into the idea that the U.S. Constitution should have have contained pre-programmed spin-off provisions similar to the Thermo Electron business plan. That way we would have avoided the War Between the States and numerous incredibly wasteful overseas imperial adventures. We would have also avoided a one-size-fits all monetary policy under the sinister Federal Reserve Banking System and the growth of the high taxation, Zionist-dominated, open borders, big Federal Government police state.

Let us be very generous. Let us imagine for the sake of argument that the U.S. Government today could be characterized as a fair, noble, wise, efficient, and benevolent entity. Let us also try to imagine that it actually does more good than harm. Even in view of all of this, on basic principle, I would still advocate seriously exploring the idea of peacefully divesting portions of America with separate currencies, military forces, border control, and other instruments of local sovereignty. On balance, increasing political decentralization is a good thing.

Simple Form, Lean Staff (this phrase courtesy of In Search of Excellence): Small companies tend to have fewer layers of management to slow down decision-making. They tend to be less encumbered by rank, formalities, and protocols. They also tend to have smaller staffs, whose members tend to know each other better and work more cohesively. Corporate leaders are more likely to take responsibility and show initiative than engage in bureaucratic blame and responsibility-shifting games. In short, small companies tend to be vastly more flexible, efficient, and responsive compared to large companies.

On a national political level, the start-up U.S. government back in the early 1800's was more likely to leave citizens alone and not tax them, and that in itself says a lot. It showed greater concern for its "product quality" as a "service business" by keeping itself much better constrained within its charter, namely the Articles of Confederation, Constitution, and Bill of Rights.

Better focus: Small companies tend to have fewer product lines, which can mean better management focus in areas of core competency. This can also imply greater closeness to the customer.

On a national political level, smaller countries tend to have fewer layers of government and tend to be more responsive to local needs. They tend to be less interested in changing the world with imperial adventures and are more focused on internal affairs.

Although the aggressiveness of Israel today would seem to comprise a major exception to this observation, actually it is not. AIPAC and other Jewish organizations control the U.S. Government. Jewish interests exert imperial power elsewhere in international finance. The state of Israel is merely the tip of a uniquely international iceberg.

Greater Transparency: Small companies tend to be less complex than large corporations, and easier to monitor. With fewer product lines and layers of management, it is easier to connect management performance with business results.

In contrast, CEO's of large companies often like to increase the size and complexity of their organizations to hide their incompetence. In his 15 Oct 2001 Forbes column, Kenneth L. Fisher provided a classic example: "So what does [the new Hewlett Packard CEO Carly] Fiorina do two days after the [HP] stock hits a five-year low? Announce that HP is acquiring Compaq Computer for $25 billion. For Fiorina's career this deal is a time-buying smokescreen. Now no one ever will be able to see if she accomplished anything fundamental for at least several more years. The time and energy spent integrating Compaq will take center stage and obscure her past mistakes at HP."

National political example: In terms of the level of integrity, accountability, and efficiency in government, the best experiences Americans ever had was during the colonial period and the first decades of the young republic. Never has government done so much with so little in term of serving the direct interests of its constituents. In terms of helping to increase their land base, defending liberty, and dealing with their direct enemies (hostile Indians and French and British imperialists), it is hard to beat a track record that includes throwing off the yoke of the greatest maritime empire on the planet and extending the settleable land base from the eastern seaboard all the way to the Pacific.

Conversely the worst governments Americans have ever had has been in the last one hundred years. The era of big government has been characterized by obnoxiously invasive social reengineering programs at home, continual destruction of the value of the currency, and incredibly wasteful, pointless, and destructive adventures overseas.

Greater stakeholdership: Small company managers tend tend to have proportionately large share positions in their companies. They also tend to have more pride and ego invested in the success of their companies, particularly when they are inventor-entrepreneurs. In contrast, the professional managements of big companies are more likely game the system to carve out perks for themselves regardless of underlying corporate performance.

National political example: In his excellent book Democracy: The God that Failed., Dr. Hans-Hermann Hoppe describes how it is critically important that a nation's leaders have a sense of long term caretakership. Unfortunately certain types of social democracy can incentivize politicians to focus on creating regulations and spending public money to make names for themselves in the short term, even though all of this may grow disastrously out of control over the long run. As countries become ever larger and filled with increasingly disparate factions, this irresponsible behavior tends to only grow worse. I discuss his anarcho-libertarian perspective in greater detail later in this article.

From the libertarian racial nationalist perspective, small countries imply more homogeneous populations whose leaders tend to identify more with the common citizenry. This helps to provide a greater sense of stakeholdership and longer term perspective towards serving their interests.

Small companies help keep big companies honest. In addition to providing product competition, they can threaten to hire talented people away from large firms. Dr. Murray Rothbard observed in one of his Mises Institute lectures that the most practical threat to achieve real wage increases is not a union strike, but the ability of employees to jump ship to higher paying jobs elsewhere. (The political analog is what libertarian professor Dr. Ralph Raico calls "preserving the right of exit" in defense of liberty). In fact, small businesses create most of the new jobs in America. In the real world, it is impossible to have a fair contractual negotiation if neither party is free to pick up its marbles and go elsewhere.

National political example: In his Mises Institute lectures, Dr. Ralph Raico claims that the break up of Europe following the collapse of the Roman Empire aided the cause of liberty. With the existence of more competing states and principalities, if rulers became abusive, it was much easier for their most productive people to pick up and move elsewhere. One of the best deterrents to tyranny is the ability of people to split from the program as either individual separatists or as national secessionists. In fact, this was a belief explicitly stated by Thomas Jefferson in his Kentucky Resolutions of 1798.

The deeper dark side here too

Unfortunately, in the last few decades America has shifted towards a much more short-term focused, immediate gratification society. This sad trend, described in American Values Decline (carried by America First Books) has infected all strata of our society and all regions of the country. From my own personal experience in the business world, I have observed how quite a few small business leaders suffer from the same generalized greed disease as their big corporate counterparts. The games they play may be a little different, but the end results in terms of defrauding the general public are very much the same.

While it is true that small companies create most of the new jobs and innovation in America, it is also true that one of the easiest and most lucrative forms of robbery in America involves posturing as a small start up company entrepreneur and selling investment stories to the public that consist of promises without intent to deliver. After raking in tens of millions of dollars in cold cash with public offerings, the wily small business operator can start paying big chunks of all that to himself with a high salary. He can also cash in on ample stock options given to himself that exploit his company's market capitalization. There are millions of ways he can artfully word his Red Herrings, form 10-Ks, and other public disclosure statements so that disgruntled investors several years down the line will never able to get back at him in court for lying through his teeth.

The best defense against this behavior is "buyer beware." While working as a stock broker, my best defense was to personally attend trade shows and corporate offices. This enabled me to meet corporate leaders face-to-face to find out important information frequently ommitted from public documents. It was particularly helpful to speak directly with competitors and other peers within an industry sector of interest, and then perform my own analyses of company disclosure documents.

I found most analyst research put out by most major Wall Street firms to be so filtered and shopworn as to be practically worthless. This basically confirmed Peter Lynch's viewpoint in his classic work One Up on Wall Street about the need to do ones own grass roots research.

I do not think government is capable of solving this problem with more regulation and oversight. For starters, our corrupt government in Washington, D.C. is hardly immune from the greed and dishonesty that has infected the rest of our society. Treating it like a white knight is like asking the blind to lead the blind.

Secondly, free markets are so vital for the effective functioning of whatever is left in our economy that we dare not tamper with them in any way. Later in this article I discuss some libertarian views on this problem in more detail.

Compulsion vs. Contract

Another interesting way to view the top down vs. bottom up debate involves examining the ethical character of human interaction.

Top down theorists tend to focus on duty-based ethical viewpoints, whereas bottom up, libertarian thinkers tend to overweight contractual ethical systems, followed by utilitarianism.

The so-called "Founding Fathers" of America were very contractual in their thinking. I think that it is very important to examine the deeper meaning of their "contractualism."

As some background on the differences between these ethical approaches, many ethical scholars have divided ethics into three broad categories:

a) Duty based: The quality of ethics are judged according to the ability to conform to authority figures and carry out specific tasks.
b) Contractual: Ethics are judged by the ability of people to live up to their contracts
c) Utilitarian: The quality of ethics are based upon a cost-benefit analysis of the results of the behavior.

I discuss each ethical approach in greater detail in Part Six of my series on the mobile robotics revolution where I evaluate the ethical limitations of Isaac Asimov's three rules for supposedly fail-safe robot behavior based upon a scenario portrayed in the movie I, Robot. Suffice to say for here that typically there is no one approach to ethics that has all the answers, but rather the best solutions typically come from analyzing a particular ethical issue from all three viewpoints simultaneously.

Duty-based ethics are attractive to large organizations with pyramidal organization charts. By their very nature, these types of organizations tend to be filled with functional specialists. Each layer of management tends to focus upon defining and supervising the execution of specific tasks for each layer underneath it, all the way down the chain of command.

In contrast, a contractual ethical orientation tends to have a better fit for people who work within small companies. People are more likely to interact on an informal level where they establish "unwritten rules" for getting along. Their jobs more frequently overlap, and they are more likely to operate like "Jacks of All Trades" where initiative and independent analytical abilities are more highly valued. They tend to be evaluated more on their ability to act in "good faith" according to broad contractual expectations as compared to their ability to fulfill very specifically defined cookie-cutter duties. In many limited partnerships and professional corporations people are in fact legally defined as independent contractors where they frequently renegotiate their terms and conditions for doing business as they go along.

Back when America was a young republic, most Americans were clearly much more contractual in their political thinking than Americans today. The Articles of Confederation and U.S. Constitution are in essence nothing more than contracts. None of the Founding Fathers ever advocated treating them like holy documents. In fact, even George Washington, who was more authoritarian and statist than Thomas Jefferson, talked in his 1796 Farewell Address about "....This Government, the offspring of our own choice, uninfluenced and unawed, adopted upon full investigation and mature deliberation..."

An important libertarian point I will repeat later in this series is that the U.S. Constitution and Articles of Confederation were about constraints on government, not legal limitations on citizens.

Americans did not need any government to help them be free. They were already free without the creation of a central government and were determined to keep it that way. A classic example was Watauga Association at Sycamore Shoals in eastern Tennessee during the 1770's and 1780's that supplied the Overmountain man militia that helped win the Battle of King's Mountain. It practiced grass roots democracy and had most of the sovereignty features of an independent country. Most pioneer communities in early American functioned very well on their own and had no need for central government, except in rare instances to help deal with major military threats posed by Indian confederacies or by French, Spanish, Mexican, or British troops. .

Thomas Jefferson once observed that "When the people fear their government, there is tyranny; when the government fears the people, there is liberty."

One can sense this grass roots freedom by reading historical accounts that continue through the creation of the Texas Lone Star Republic, the California Grizzly Bear Republic, and the first provisional government of Oregon created in 1843. Americans handled most government functions on a local level. Most of them owned their own farms where they worked as their own task masters. By contemporary standards, life was hard. This helped to condition them to not expect life to be easy and to be braver in defense of liberty.

Americans were more likely to form their own opinions based upon their own common sense and their own direct experiences. The most sophisticated propaganda they were subjected to came from their Bibles and local religious ministers. Newspaper media in America was very decentralized compared to the programming disseminated today by Jewish supremacists and their bought-and-paid-for professional propagandists in New York City and Los Angeles who monitor nationwide television viewing habits almost by the hour.

Clear duty-based vs. contractual fault lines in British society

In 1884 Herbert Spencer published an famous article titled "The New Toryism" which applied this duty based vs. contractual line of social analysis to British society.

In the early 19th century British Whigs, who were also known as old Liberals, were known as the party of contract. They tended to be very libertarian. They were particularly prevalent among tradesmen and entrepreneurs of the Industrial Revolution, who obviously needed elbow room to do business deals. Their emerging businesses benefited from minimal state taxation and regulation.

In contrast, the Tories were known as the party of duty. They were overly represented by landed interests and old feudal relationships. They sought to protect special privilege.

In his essay, Herbert Spencer quotes Bolybrooke, who characterized Whigs and Tories as follows:

"The power and majesty of the people, an original contract, the authority and independency of Parliaments, liberty, resistance, exclusion, abdication, deposition; these were ideas associated, at that time, to the idea of a Whig, and supposed by every Whig to be incommunicable, and inconsistent with the idea of a Tory.

"Divine, hereditary, indefeasible right, lineal succession, passive-obedience, prerogative, non-resistance, slavery, nay, and sometimes popery too, were associated in many minds to the idea of a Tory, and deemed incommunicable and inconsistent, in the same manner, with the idea of a Whig." Dissertation on Parties, p. 5 [1735, p. 4].

Herbert Spencer points out an important irony that was taking place after the mid 1800's. The Whigs, now known as Liberals, were passing lots of social legislation. The topics included compulsory education, working hours, business competition, working conditions, housing, electric lighting rates, and so on ad infinitum.

Spencer observed that now that Liberals were piling on more and more government laws and regulations, they were giving individual liberty the slow death of a thousand knife cuts. They were effectively creating the same climate of government-sponsored coercion that they had opposed in the Tories decades earlier. The fact that the liberals felt they had good intentions or a better social purpose did not matter in the final analysis. To Spencer, too much state-sponsored coercion that regimented society was bad no matter how it was motivated. Hence, "The New Toryism."

Incidentally, Dr. Paul Craig Roberts has updated us on Spencer's theme in his excellent book The Tyranny of Good Intentions.

In America, Whigs were morphing into another dangerous species of compulsive animal. American Whigs aggressively sought special privilege through such government programs as protectionism, public works, and a central bank. One of their main champions was Abraham Lincoln, who I will discuss in greater detail later.

The irony here is that as that once American Whigs gained their special privileges, they now achieved government police power backing for their industrial products just like the way old Tories in England demanded government backing for their landed interests.

The War Between the States might be viewed as a conflict between America's "New Tories" consisting of Northern industrialists who demanded state support for their high tariff program, fighting it out with Southern-style "Old Tories," consisting of a landed planter class wishing to preserve their slave-holding privileges.

All of this was a departure from genuine classical liberal principles asserted by Thomas Jefferson. He sought to minimize special privileges for everyone within Anglo-Saxon society, while simultaneously promoting free enterprise and meritocracy.

In his famous article, Left and Right, Dr. Murray Rothbard cited the Herbert Spencer selection above and observed:

The Old Order was, and still remains, the great and mighty enemy of liberty; and it was particularly mighty in the past because there was then no inevitability about its overthrow. When we consider that basically the Old Order had existed since the dawn of history, in all civilizations, we can appreciate even more the glory and the magnitude of the triumph of the liberal revolution of and around the eighteenth century.

A major problem that I have with many anarcho-libertarian writers is that they assume the liberalism that displaced the Old Order was purely an ideological creature. I think that this can create confusion, because a phrase such as "old order" might also imply folk traditions and ancient common law, such as the Anglo-Saxon common law, that supported decentralization.

As I explain in my environmental vs. genetic discussion as well as in my libertarian racial nationalist interpretation of American history, an urge towards decentralization has existed among Europeans ever since prehistoric times. This is particularly true among the Nordic and closely related Celtic peoples. Decentralization tendencies have a strong genetic component, shaped by tens of thousands of years of evolutionary history under highly dispersed social conditions in frost zone environments. The liberal revolutions of the 18th and 19th centuries were actually cyclical, historical regressions to the mean of innate social patterns that have repeatedly surfaced in European history for ages.

In other words, white Americans today do not need any U.S. Government or any Zionist-dominated media or Zionist religion to tell us how to be free. Much of our spirit of freedom is in our genes.

But I repeat myself. I have already quoted Thomas Jefferson about the need for government that fears its own people in order to have liberty. He essentially made the same point.

The tax-eaters vs. the tax-producers

As an important variation on the "Compulsion vs. Contract" theme, I have also already mentioned Dr. Ralph Raico's Mises Institute lectures on the evolution of classical liberalism, where he described how certain 17th and 18th century French libertarian economists divided the political order into the "tax-eating" classes and the "tax-producing" classes.

Obviously the "tax-eating" classes were the duty-based class of compulsion versus the "tax-producing" classes who were clearly the classes of contract.

According Dr. Ralph Raico, Karl Marx plagiarized writings of these earlier French libertarian thinkers in many of the initial passages of The Communist Manifesto. Unfortunately Marx also perverted their ideas.

The early French libertarians saw small businessmen and other entrepreneurs as the "tax-producing" good guys, and government despots, bureaucrats, and standing armies as the "tax-eating" bad guys.

In contrast, Karl Marx twisted all of this around. This Jewish false prophet saw entrepreneurs and small businessmen (the "petit bourgeois") not as good tax-producers, but as bad guys and class enemies of "oppressed masses." Government — in the form of Red dictators — does not consist of bad "tax-eaters," but instead comprises the good guys and champions of the masses.

"Down-sizing" Government Much More Critical To Society Than "Right-Sizing" Individual Businesses

In my "Critical Issues" section, I refer to over-sized government as "predator." I explain that it is one of three major monsters that is wrecking America today. It is important to review some libertarian ideas about the inherent evils in excessive government.

These are ideas, incidentally, that were well known among Americans back in 1776. "Liberty" back then meant "freedom from government." The American revolution was essentially a libertarian revolution. We should sense an Orwellian contradiction when we hear politicians talk about the need for greater government size and interventionism at home and abroad to promote freedom, since they are talking about creating more forms of government to create more freedom from government.

In his excellent book Why Government Does Not Work, Harry Browne (1933-2006) described how excessive government size and centralization is fundamentally different and vastly more dangerous than similar issues involving businesses.

One critical difference between government and business is the fact that our contact with businesses is usually always voluntary. If we do not like a particular business' products or services, we can usually go shop somewhere else. In contrast, it is usually a lot harder to move to another country and change citizenship if we do not like our government. If we decide to retain our citizenship, we are forced to pay taxes regardless of how we feel about our government's policies. Worse than that, if we continually refuse to maintain our "subscription" to the Internal Revenue Service, the government is prepared to infinitely escalate the level of force it can use against us. After the initial polite reminder call or letter, our continued resistance can eventually bring us not-so-polite visits from SWAT Teams, FBI snipers, or National Guard units. In contrast, there are no car, magazine, soap, or toothpaste manufacturers who are prepared to blow our heads clear off if we adamantly refuse to patronize them.

Every time people come up with noble-sounding ideas for government legislation, they are in effect admitting that they are incapable of getting these wonderful things accomplished by using only voluntary means among their fellow citizens. Instead they need to back up their wonderful ideas with the threat of state police power.

But in the final analysis, there is nothing innocent about government. No matter whether the government decides to spend our tax money for victims of a natural disaster, or to help tiny cute little tots get better meals in schools, or to do obnoxious things like fund Andres Serrano's photographic "artwork" that shows a crucifix dipped in urine, it does all of this from "one-size-fits-all" tax bills that are ultimately backed up by a gun put to your head.

Not surprisingly, the incentive structures and informational feedback systems for government officials are very different compared to business executives.

In a free market, business leaders have strong incentives to continually devise new product ideas that give consumers more discrete purchase choices. In a competitive free market, if they fail to produce better choices with better quality items and at better prices, sales will plummet and they will eventually go out of business.

In contrast, whenever government programs fail, we typically see politicians dodge the issues, shift blame, offer excuses, institute cosmetic changes, make false promises, or justify failure in the name of phony patriotism. Then it is business as usual collecting more taxes from us through our compulsory IRS "subscriptions." After this goes on long enough, where we continue to pay taxes, and government continues to fail to deliver, it begins to sink in that we have effectively become vassals locked into tribute-paying bondage.

If citizens get really fed up with this "feudal democracy" and threaten an insurrection, well, good luck achieving success. A few hundred thousand Americans were willing to give their lives and still failed to get the U.S. Government off their backs when they had a third the white population on their side back in the 1860's. It is unlikely any dissident group will ever be able to mount even that level of resistance again. The Feds and their national media allies are just too slick. Instead, it looks like we will just have to wait for the Federal monster to collapse in blow-out inflation, bankruptcy, and massive corruption, much like the old Soviet government in Russia.

Meanwhile, as Harry Browne frequently observed, government continues to create even more dysfunctional programs as "solutions" for pre-existing programs that have been proven failures. New programs are usually always based upon politics, and have very little to do with sound economic logic. Usually the people who directly benefit from these programs have better political connections than either you or I.

For all practical purposes, most government jobs are inherently hierarchical, authoritarian, and bureaucratic in nature. This usually means the top priority involves satisfying the boss who writes evaluation reports, rather than the public. This in turn means making him look good and aggrandizing ones own department, regardless of how it might grow like a cancer.

Worse yet, the people who run government departments are usually scared that if they do not spend everything that they are allotted within a budgetary cycle, that they will get cut back the next cycle. Therefore, there are very few if any incentives to minimize waste.

Last, but not least, in this highly structured and politicized environment, most government employees have absolutely no business sense at all. They are very poor at engaging in any form of competent entrepreneurial calculation, where they successfully juggle expected market demand against production and marketing costs and other elements of a competent business plan.

In most cases where government is capable of pursuing a "successful" economic project, it usually involves something very crude and primitive, like using its troops to seize territory and productive assets. Or it will simply copy-cat business plans and procedures developed in the private sector. Usually it needs to hire private sector consultants to figure out how to implement these things.

All of this means that while government is very good at consuming wealth and distorting the free enterprise economy, it is usually incompetent when it comes to creating any real wealth. The creation of wealth implies the ability to produce more things of higher quality at lower cost in a way that they pay for themselves. Profitable production increases the quantity of useful things in society. This becomes its store of accumulated wealth.

In contrast, government by itself is rarely capable of producing things at a cost where they pay for themselves. Therefore, left only to itself, it will tend to run down the productive assets of a society. This has been proven repeatedly in centrally planned, socialist economies where government has taken over the primary means of production and has failed miserably at running them in an economically viable manner, particularly when faced with dynamic free market competition.

Therefore, left only to itself, over the long run government tends to act like an economic parasite.

Admittedly, we do need a certain minimal amount of government. It can serve important protective functions necessary to support successful overall social functioning. Even anarcho-libertarians compare useful government with the way businesses require certain minimal levels of insurance in order to survive and be productive. We need courts...we need policemen...we need military defense...for certain crises we may even require "energetic" leadership...I am not arguing this point. However, the issue remains how much "government" is just enough to aid the ability of society to protect itself and be productive, and how much government over this amount becomes wasteful and "parasitic."

We know that in the first half of the 19th century, Americans successfully kept government at less than 5% of GDP. And they prospered mightily. Today, total government in American consumes over 40% of GDP. The long term macro-economic trends identified in my Critical Issues discussion show that America's economy has been steadily deteriorating. I would wager that at least three 80% of this government percentage of GDP is "parasitic." Perhaps embedded somewhere in the remaining 20% we can find government that is truly necessary and "productive."

Near the beginning of this article I discussed the "viral persistency" of plutocratic interests who have continually pushed America towards centrism in the last century. Government evil has been promoted by self-serving private interests who need the coercive power of the state to pursue their anti-nationalist, blank check pro-Zionist agenda. Therefore the problem is much more complicated than simply making the government itself the bogeyman for all our ills. Populism vs. Plutocracy: The Universal Struggle edited by Willis A. Carto provides some good background on efforts by genuinely patriotic American leaders to deal with this broader social problem.

Unfortunately this problem is escalating. We have even been put on notice by Fed Chairman Ben "helicopter money" Bernanke that our privately owned central bank monopoly and its U.S. Government allies are prepared to infinitely inflate the dollar to ruthlessly defend their interests and prolong their existence at all costs, even if it means rendering the dollars in our billfolds completely worthless. All this, not to mention their open-ended "war on terror" that threatens to continually escalate in the Middle East.

What could be a clearer statement of "The public be damned?"

Why saying "More Government is Good" is like saying "Greed is Good"

"Government" has unfortunately become a secular religion for most Americans. They have been deeply indoctrinated to believe that activist government has inherent moral virtue. One of the leading early culprits behind this trend was "King Lincoln," who said in 1838 that the Constitution and the laws of the United States had to become the ‘political religion’ of the American nation. This, despite the fact that Lincoln himself was an atheist, and promoted the financial interests of his own political faction even if it meant risking an unnecessary war that got over 640,000 Americans killed. (More on this later).

One can even find this sentiment in a book such as The Constitution of the United States by Thomas Norton, first published in 1941, which dissects the Constitution line by line. Norton's interpretations are framed by the assumption that America needed more efficient central government in 1787 compared to what it had under the Articles of Confederation. According to Norton, the Constitution was designed with checks and balances to prevent excessive power grabs and self-dealing as leaders go about more efficiently guiding the country.

Implicit in Norton's discussion is an underlying belief in a need for energetic political leaders. For all intents and purposes, people who want more "efficient" government oversight also want more "energetic" and "activist" oversight as well.

This reminds me of the character played by Jimmy Stewart in Mr. Smith Goes to Washington (1939). Most American movie audiences tend to be very sympathetic towards Stewart's extremely energetic, if not utterly dramatic character. While it is true that Smith opposes a corrupt Senator who seeks to make millions in kickbacks on a pork barrel dam project, it is also true that Smith himself energetically pushes through a government program to create a camp for boys in his home state. Hence, this Frank Capra movie classic lauds energetic government involvement in social programs so long as it does not involve kickbacks.

Thomas Jefferson voiced a totally different attitude when he said, "In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution." Furthermore, when Jefferson received correspondence about a Constitutional Convention to be held in 1787 to create a "more energetic government," Jefferson responded that the last thing he wanted was a "more energetic" Federal government.

Despite all of this, most people might think Jefferson was merely being "cautionary." In fact, these comments were barely the tip of a libertarian iceberg once espoused by sizeable group called anti-Federalists. (I revisit them again later in my discussion of libertarian racial nationalism).

Frank Capra's scripting of Mr. Smith as a folksy, populist politician also stands in opposition to another well-established American folk hero. In his famous "Sockdolager" speech, Davy Crockett argued before his fellow Congressmen that there is so much money available in the private sector for charitable purposes that the government, with all of its fiercesome coercive powers, has no business muscling on making charitable decisions.

Looking deeper below the water line of the libertarian iceberg

An excellent "religious deprogrammer" to help explain the full early American libertarian iceberg below the waterline is Dr. Hans-Hermann Hoppe, Professor of Economics at the University of Nevada, Las Vegas. As mentioned earlier, he is the author of Democracy: The God That Failed: The Economics and Politics of Monarchy, Democracy and Natural Order.

According to Dr. Hoppe, government is inherently negative in nature. The healthier a society becomes, the more it should make government irrelevant. Instead of making government more energetic and efficient, the priority should be to simply make it go away.

First, we need to look at government's real function in our society. According to libertarians, one good working definition of government throughout history is it consists of whoever happens to be the monopolist on the use of force in a given territory. George Washington once summed it up when he said, "Government is force. And force, like fire, is a fearful servant and a terrible master."

Force, or coercion, is the negation of the voluntary relations we seek to maximize in an ideal society. When voluntary cooperation breaks down, and individuals and factions can no longer mediate their differences on a private level, they typically call in the government to use force through its courts, police, and military. Force implies the real or threatened destruction of lives and wealth. Hence Dr. Hoppe claims that it is more accurate to say that what government really produces relative to the private sector are "bads" (or negative things) rather than "goods" (or real wealth).

Dr. Hoppe raises a provocative question. Whereas we understand how it benefits us to have the private sector compete in a free market to produce "goods," do we really want to see the same level competitive excellence devoted towards producing "bads?" Do we really need to see the "best and brightest" vigorously compete with each other in "social democracy" to sell us more government programs, which are inevitably followed by more taxes and more government intervention?

A look at early American history gives us an important libertarian baseline. We need to ask how much of our government added since then consists of a slick sales job by professional politicians and special interests, as compared to the lessor amount of government that we probably really need. In other words, to what extent can we compare the taxpayer to a healthy dog, and professional politicians and special interests to swarms of fleas?

Dr. Murray Rothbard, in his history of colonial America, described how most farming communities in 18th century Pennsylvania had virtually no government at all by modern standards. Part of the reason was benign neglect. The ruling British government and its pack of attendants, to include lawyers, professional politicians, and bureaucrats, were across the ocean. Many of them viewed the colonials as basically a bunch of bumpkins barely eking it out battling the wilderness. Nothing of particular interest.

However, while "out of sight and out of mind" for nearly a hundred years, this "bumpkinland" grew into the size of regular European country. Meanwhile, it still had almost no government by European standards. Nevertheless, the colonists did not seem to be missing anything. In fact, in the absence of government, they seemed to be quite a bit happier and more prosperous.

Then the British Government started to wake up and notice a fat economy ready for mercantilist trade policies and tax harvesting. The precipitating event involved the heavy expenses it incurred fighting the French and Indian War. The Crown started wondering why colonists should not help foot the bill.

On the other side of the Atlantic, the healthy tax dog saw the swarms of government tax-collector fleas coming its way and resisted. That, in a nutshell, is what started the American Revolution.

In the first decades of the new American republic, before it served as a Darwinian petri dish for breeding its own particularly virulent strains of homegrown political parasites (not surprisingly the the worst types evolved from lawyers, financiers, and professional politicians), Americans enjoyed great success in keeping government at bay. Dr. Ralph Raico points out in his lectures on classical liberalism that when French observer Alexis DeTocqueville visited America in the 1830's, he noted that his native France had about ten times as many bureaucrats with nearly the same population. Similarly, when the Russian anarchist Mikhail Bukhanin arrived in San Francisco in the1850's after fleeing Czarist police, he commented that he had nothing to offer Americans, because as far as he could see they were already living in his idealized state of anarchy.

Americans communities seemed to exemplify what the nobel laureate economist Friederich Hayek called spontaneous order. Pioneer groups quickly organized all the social services they required on a grass roots level without any central direction. Most Americans belonged to numerous volunteer organizations, such as charities, fire departments, courts, juries, sheriff's deputies, and political affairs councils. They handled everything privately, and given their limited resources, they were amazingly effective.

Early America also exemplified another important aspect of the spontaneous order concept, namely that it ran itself as a complex system from the ground up without central planning. Dr. Thomas DiLorenzo's book How Capitalism Saved America describes how Americans did a much better job creating roads, railroads, and canals with private investment than through government programs.

Most people have this notion that as economies and societies get bigger, they require more centralized command and control. Friederich Hayek argued that in many ways the opposite is true. He observed that once economies achieve a certain level of complexity, they must be run by decentralized decision nodes, and cannot be competently run by central planners. The information inputs and complexities are simply too overwhelming to be handled by humans in central planning positions. There are too many complex interactions at different levels. Furthermore it is impossible to gather enough accurate ground-level information in all areas to make rational decisions. Indeed, in regard to a free market where prices automatically adjust according to supply and demand, this also functions as a highly decentralized information system and clearing house.

Please recollect at the beginning of this article the example provided by William S. Lind. To be successful at maneuver warfare, even Adolf Hitler's armies had to operate on a decentralized level. Some of his top commanders such as as Erwin Rommel were famous for literally living out of their squad cars where they could always remain close to the front lines and quickly react to events as they unfolded in real time.

An important reason why America enjoyed steady solid economic growth throughout most of the 19th century, apart from the high genetic quality of its underlying population and the relative absence of Zionist parasitism, was due to the fact that America remained highly decentralized. It did not suffer from many forms of imposed order found in Europe, which typically did more harm than good. An area called complexity theory that deals with this phenomenon is also very compatible with the "Austrian" or laissez faire schools of economics.

I would personally interject here my own interpretation that all of this was simply a continuation of a much older story. The white population was overwhelming Anglo-Saxon, who are a Nordic/Indo-European people. Other whites in America during the 19th century tended to be Celtic, who are very similar to Nordics on all levels. One sees plenty of evidence of "spontaneous order" with these peoples going back to ancient and even pre-historic times, whether it involves Norsemen who settled Iceland, the Oscian and Sabine tribes from Germany that helped found the Roman Republic, or ancient Ionians and Dorians who swept down from northlands and settled ancient Greece. Northern European temperamental traits, which tend to focus upon individual initiative and creating things of real value, set the tone for America up until the late 1800's.

We can look at parts of Norway, Scotland, Iceland, and other northern European countries from the Middle Ages back to prehistoric times and see how people lived in dispersed, self-sufficient communities where the largest political organization was usually the extended family or clan. There was no real central government by modern standards.

Every so often I come across passages that allude to republican tendencies in pre-Christian Europeans. One example is on p 70. of The End of Kings: A History of Republics and Republicans, where William Everdell writes about the pre-Christian Roman conquest of Switzerland.

The Swiss have no Caesars of their own. They were conquored once by an alien Caesar, Julius himself, in 58 B.C., and were ruled by his successors until A.D. 401. The symmetry is pleasant, for it was the defeat of the Helvetii in the Alpine passes that began Julius Caesar's military career. The career, in turn, made it possible for Caesar to destroy the Roman Republic and inaugerate a millenium of monarch to which the Swiss would eventually become the only exception. Nor did the Helvetii lose ingloriously. Like most barbarian tribes then (and the Romans themselves before Romulus) the Helvetii were strongly opposed to the permanent hereditary rule of one man; so strongly, in fact, that in the very face of Caesar's advance they deposed and executed their greatest war chief, Orgetorix, because he had tried to make himself king.

Unfortunately detailed historical records about many northern European societies did not begin to appear until after they were Christianized. Medieval christian leaders tended to be political centralizers and economic monopolists, often in the name of the forceful conversion of the heathen. Their scribes tended to interpret social phenomenon according to their alien Jewish religious ideology.

One good example of an adverse impact was medieval France, where Christians discouraged bathing, supported heavy-handed Kings, exerted thought control through a confessor system, and where the Church itself gobbled up control of much of the land. According to an article that appeared in the American Atheist, living standards among the common people in France dropped below Neolithic times.

Iceland is a fascinating example of a northern European society that remained quasi-pagan, politically independent, and largely avoided the full brunt of Christian totalitarianism. Icelanders functioned normally within a quasi-anarchistic republican system for many hundreds of years without any real class structure or permanent government bureaucracy.

In many ways the settlement of early America was a "back to the future" exercise where northern Europeans shook off the encroachments of government and state-allied church apparatuses that had begun in the Medieval period. Part of this revolt began in Europe with the Protestant Reformation, which promoted church government decentralization and individual interpretation of scripture. In the American wilderness, their reversion towards their ancient European indigenous type took an extra step.

There was once an age in European evolutionary history when Stone Age white people probably wore buckskin just like the American frontiersmen who came later. In many ways, white people were much freer and happier back then when they functioned in smaller wilderness groups on a racially and culturally cohesive tribal level. The works of the late great British anthropologist Sir Arthur Keith are worth reading to get a better sense of all of this.

Unfortunately early American pioneers were not aware of their real anthropological roots on an intellectual level. Many of them carried Bibles. These scriptures not only failed to educate them about authentic Indo-European traditions of scientific thought, republican theory, and rational ethics espoused by ancient Greeks and other whites, but they also focused the attention of American pioneers on alien ancient Jewish tribal traditions rather than upon their own indigenous ancestral values. There was clearly some subtle brainwashing and theft of heritage taking place here. Despite all this, American pioneers in the wilderness still felt instinctively that they were experiencing something that was very natural and wonderful to them.

As another very critical political point, these Northern European peoples always tended to take free speech for granted since ancient times. Free speech basically meant that people applied the same kind of logical analysis that went into rotating crops on farmland or building a boat to brave the North Sea into openly keeping track of whether or not their political leaders kept their agreements and did things that made sense.

The Roman writer Tacitus remarked that virtually all able-bodied men in ancient Germanic (Nordic) society were armed. If you did not carry a sword or spear, you were simply not regarded as a real man. They were often expected to draw their weapons and duel for honor under rules of chivalry when dishonest men tried to cheat them. The idea of making a living by deceiving people, or by living a double life where one continually swallows and perpetrates lies, or by never daring to say what one really thinks while suffering under arbitrary and devious men in power, was very alien to them. All of this was not foreign, however, to Jewish supremacist infiltrators who moved into America in the late 1800's to foist a central bank, usurp national media, and more recently undermine our civil liberties by exploiting 9-11 to promulgate war for Israel.

It bears repeating that many libertarians are quick to emphasize that the Articles of Confederation and the subsequent United States Constitution and Bill Rights did not give any rights to anyone, rather they simply circumscribed the ability of government to take away our rights. I would add to this that these documents circumscribed the ability of government to suppress behavioral tendencies that early Americans and their ancestors had expressed for tens of thousands of years. The American Revolution was fundamentally a libertarian revolution in which Americans tried to make governmental intrusions go away so that they could get back to their normal affairs. It was not some kind of new political rights revelation handed down to them from the clouds.

Back to Dr. Hoppe

Let me return to Dr. Hoppe. Incidentally, I need to point out that he is an anarcho-libertarian. Such folks tend to refrain from racial analysis. In contrast, I am tilted towards libertarian racial nationalism. I say this just so that you do not confuse his views with my own.

Another key idea emphasized by Dr. Hoppe is the importance of a sense of caretakership. When people lack a sense of long term investment in their own society, this is the same as saying that they have a short time preference in economics jargon. They tend to be greedier and feel a need to plunder as much as they can as soon as they can.

"Democracy" will not necessarily save such people. In fact, it can add fuel to the fire. Dr. Hoppe notes that with the rise of "social democracy" throughout Europe after World War I, politicians began to aggressively promise more social spending and regulation in order to make a name for themselves and get elected. Since they were only allowed to stay in office for a limited number of terms, they knew that excessive social spending and regulation would inevitably get passed on to someone else after they left office. Their excesses would simply become someone else's problem.

Not surprisingly, government as a share of GDP expanded from the 5-10% of GDP range where it had remained throughout much of the 19th century to over 40%-50% of GDP by the end of the 20th century. This was true of most governments in Europe as well as the governments of the U.S. and Canada.

Dr. Hoppe refers to social democracy as "publicly owned government," and contrasts it with monarchy and oligarchy, which he calls "privately owned government." In a privately owned government, its leaders know that they can pass on their political estate to their heirs, and hence tend to have a much longer time preference and sense of caretakership.

Dr. Hoppe makes the really interesting point that a country with a stable, constitutional monarchy might really be a libertarian society in disguise. Consider if the monarch and his cabinet are content to act within traditional bounds and never show an urge towards tyranny. Imagine that their government is content to refrain from increasing regulation, taxation, or spending above 5% of GDP. Clearly, the remaining 95% of the economy is fairly free to do as it pleases. People in the private sector may enjoy vastly greater property rights and real political freedoms compared to people who live in a "social democracy" that has taken over 40% of the economy and continually burdens people with new regulations.

I am not advocating that we install a constitutional monarch here in America. We already have our hands full dealing with a de facto unconstitutional version named King George W. Bush. However, I believe that Dr. Hoppe is correct about the importance of the variables of time preference and caretakership in influencing political as well as economic behavior.

Later on I will discuss republicanism as a defense against for tyranny, and discuss why many libertarian racial nationalists believe that maintaining racial homogeneity can help preserve a sense of long term caretakership for common genetic interests within a republican system. For the moment lets stay with the anarcho-libertarian line of reasoning.

It Gets Even Worse with "Ponzi" Government

It is bad enough that government bureaucracies tend to grown on their own like cancers. Dr. Thomas DiLorenzo, author of How Capitalism Save America and The Real Lincoln, describes how government can get even worse by degenerating into a big ponzi scheme. I think that it is important to spend some time explaining Dr. DiLorenzo's views, since we see forms of ponzi government everywhere in America today. In addition, Dr. DiLorenzo provides important insights regarding a critical juncture point in American history.

For the un-initiated, the "Ponzi scheme" comes from the 1920's racket where Charles Ponzi solicited funds from investors, claiming he would give them a portion of the in-excess of 400% he was supposed to make on an international postal redemption scheme. Rather than invest the money, he paid part of the funds to himself and sent another part back to investors as "dividends." Since the money was not invested in anything that achieved a real return, the ponzi game continued as long as the scam operator could provide convincing fake investment reports and continually find new investors to contribute more funds.

We can see how Charles Ponzi's game was unsustainable. Nothing productive got added to the system, while he continually extracted funds for his own use. We can also see how the spread of his unsustainable approach throughout America's financial system could ultimately lead to total system collapse.

According to Dr. DiLorenzo, Abraham Lincoln publicly confessed that the central platform of his career was to promote the "Whig program" of protective tariffs, public works, and a central bank This was a centralizing program of special privilege initially championed by Alexander Hamilton and later upheld by Henry Clay. An excellent overview article is "The Real Henry Clay: The Corrupt American Architect of Mercantilism and Protectionism" by Ryan Setlif.

Abraham Lincoln never deviated from Clay's so-called "American System" during his entire career. It was his central purpose. In contrast, he waffled back and forth on the slavery issue, despite his image today as "The Great Emancipator."

As some examples of waffling back and forth on slavery and broader racial issues, Lincoln once voluntarily defended a Kentucky slave owner who sought to retrieve his runaway slave who had fled to Illinois. During the Lincoln-Douglas debates in southern Illinois, where Lincoln played to a large population sympathetic to the South, Lincoln claimed that Negroes were unfit to serve on juries and could never be the full equals of whites. Shortly after he became President, Lincoln supported the original 13th Amendment, which guaranteed slavery in the South, provided that the South agreed to stay in the Union and pay the new high tariffs. Lincoln also openly advocated repatriating blacks to Africa, and defended his Emancipation Proclamation as a ploy to appeal to anti-slavery liberals in Britain and hence help prevent Britain from entering the war on the side of the Confederacy. However, as Sam Dickson points out in his brilliant article "Shattering the Icon of Abraham Lincoln," while it is true that Lincoln spoke out of both sides of his mouth, the general trend of his career was to the left, so we can at least credit him with consistency as an abiding leftist on social issues.

But let us get back to the "Whig program" from which Lincoln never wavered. The problem with this kind of program is that in the hands of irresponsible demagogues, it can foster an unvirtuous cycle of corruption that can ultimately destroy a limited republic. It can send government spiraling along the path towards a spendthrift and ultimately bankrupt Jacobin government, which describes what we have come to at present.

As a first step of this political ponzi system, the political hack opportunistically hunts for unethical business operators who are happy to offer under-the-table kickbacks to the politician in return for his ability to pass pork legislation so that the police power of the state now supports their products against free market competition and forces patronage at higher prices.

Getting back to my discussion about the fundamental difference between the voluntary nature of most business transactions and the involuntary nature of government taxation, here is a case where the proverbial soap, automobile, and toothpaste manufacturers want to figure out ways to get government agents to threaten to blow your head clear off if you do not patronize their products at higher prices. Meanwhile, the political hack gets a kickback for creating laws that compel this patronage, while you the consumer get soaked.

Somehow I just do not think this is the kind of thing that America's Founding Fathers had in mind.

The happy hunting grounds in Lincoln's era for finding crooked businessmen willing to pay big kickbacks in return for state-enforced patronage lay in three main areas:

a) industrialists who benefited from high protective tariffs,
b) contractors who benefited from government-funded public works projects, and
c) bankers who benefited from central bank bailouts.

Let me interject here some qualifications based upon my own personal views. I believe that business interests are entitled to legitimate political representation. In addition, there can be some strong and valid nationalist arguments for protectionist tariffs, particularly when faced with a compelling need to create, jump-start, or revitalize certain strategic industries.

However, anarcho-libertarians are correct that if certain protectionist measures are left in place for too long, they tend to adversely distort free markets, corrupt politicians, and can spoil the competitive edge of domestic industries. Therefore genuinely patriotic nationalists realize that protectionism is heavily "contra-indicated" medicine that must be applied sparingly and with great wisdom and care.

Expressed differently, you may need to put the patient on the operating table, but you dare not leave him unconscious with his body opened up and on life support for too long. Protectionist measures should be generally removed after they have done their job helping certain industries achieve critical mass.

We should also note that a protectionist tariff is nothing more than an excise tax on international trade. In the long run, all taxes are bad. All taxes transfer resources from the more productive, entrepreneurial, and decentralized private sector to the more politicized, bureaucratic, and centralized government sector. In other words, taxes shift economic resources to the government where they tend to get wasted.

This is not to say that tariffs are inherently evil. Income taxes are worse, because they involve collecting private information on individuals. Estate taxes are worse, because they double-tax income. Domestic excise and property taxes are worse because they tax property ownership and internal commerce.

In contrast to all of this, tariffs may have the slightly redeeming quality that they can force segments of American industry to make long term reinvestments in American plant and equipment rather than export jobs and infrastructure overseas. Admittedly, having to force Americans to invest in fellow Americans reflects a pretty sad state of affairs, but when we are hemorrhaging most of our industry and skilled jobs, even medicine with bad side effects may be better than none at all.

Most 19th century politicians viewed tariffs as a least bad form of taxation. During this period the U.S. Governments drew most of its income from tariffs and land sales. The government generally refrained from levying personal and corporate income taxes in peacetime. Therefore, a genuinely patriotic libertarian nationalist favored tariffs only to the extent that he is very serious about eliminating all other types of taxes.

In contrast to responsible nationalists, the political hack is out to install protectionist measures every place he can in order to jingle his personal cash registers. This gun for hire also likes to leave protectionist measures in place indefinitely as permanent cash cows for both himself and his corporate cronies. He could care less about the long term impact on free markets, consumers, industrial competitiveness, or anything else. He is only out for himself.

When Lincoln ran for office, he was clever enough to pose as a folksy populist who cared about the electorate first, and not as someone working for the kick-back. However, according to Dr. DiLorenzo, Lincoln pulled many self-dealing pork whoppers. A major political "fixer" in his state, he helped relocate the state capitol at tremendous cost to Illinois taxpayers in order to benefit only a few business supporters. He also helped locate the terminus of the transcontinental railroad near some land that he owned. Awarded his own private rail car by a big rail road company, Lincoln become wealthy as a lawyer representing big railroad interests. His legal work for common people was mere window dressing by comparison.

The tariff racket

Raising tariffs in America beyond a certain point in Lincoln's era was especially irresponsible and dangerous given that South Carolina made a very serious secession threat following the 1828 "Tariff of Abominations." Despite this, Lincoln campaigned hard for the Morrill Tariff of 1861, which initially pushed the average tariff up to about 36.2% compared to the 18-20% rate that had been the norm in the 1820's. Back in those days, tariffs in the 10-20% range might be considered "normal," whereas tariffs over 40% might be considered hostile acts. Lincoln's high stakes, pork-oriented, political brinkmanship poker game blew up in his face and precipitated the War Between the States that got 640,000 Americans killed.

With only a third of the U.S. population, the South paid about two thirds of the tariffs. A huge portion of the Southern economy involved exporting cotton directly to Europeans. The most profitable and uncomplicated way to carry on volume trade with the Europeans was to exchange Southern cotton for European manufactured goods, and then back haul these goods to America. The increased tariff rate to 36.2% significantly reduced what Southerners could net out for their cotton sales both at home or abroad.

In contrast, many Northern industrialists could not compete very well against English manufacturing. They benefited by keeping European manufacturers out of the U.S. market by forcing consumers to pay higher prices for their tariff-protected goods. These industrialists were Lincoln's primary political constituents.

Many intelligent observers understood all this at the time. In fact, even Karl Marx, who admired Abraham Lincoln's leftist tendencies, observed that the War Between the States was first and foremost a war fought over the tariff issue and not slavery.

The public works racket

Many 19th century American leaders viewed public works projects as a scam because the private sector generally built roads, canals, and railroads much more efficiently than government-sponsored programs. In fact, according to Dr. DiLorenzo in How Capitalism Saved America, public road-building programs got such a bad reputation for their corruption and inefficiency across America that by 1860 most state legislatures outlawed them.

No doubt this comes as a shock to most contemporary Americans, who are conditioned to associate ordinary road and Interstate highway construction with government grants. Maybe this really shows how much we have been conditioned to tolerate corruption and inefficiency without knowing it.

The central bank racket

Thomas Jefferson, Andrew Jackson, and many other early American leaders vehemently opposed the creation of a central bank, and this was not because they were ignorant, archaic, or smoking dope. I have already discussed how the ability of central banks to issue fiat money can be very dangerous. As Voltaire once remarked, fiat money always returns to the intrinsic value of paper, which is zero. Putting fiat money in the hands of politicians and private bankers is like locking alcoholics in a liquor store.

The same is true, incidentally, of a fractional reserve banking system that goes hand in hand with central banking. This allows banks to loan out money they create out of thin air based upon a certain percentage of funds held as deposits. Expanding fractional reserve ratios can create all kinds of opportunities for self-dealing and aggressive lending. It also contributes to more extreme economic cycles as banks go through aggressive credit expansion and contraction cycles. Later I explain how the fractional reserve excesses heated up in 1913 once America got its permanent central bank.

Another major negative behind the existence of a central bank is the way it serves as a lender of last resort. While it may sound barbaric in the short run, in the long run it is much simpler and more honest to allow local banks to fail. This approach is much more likely to punish bank officers who screw up, and simultaneously quarantine bank problems on a local level. During most of the 1800's, when America had no central bank, the failure rate averaged no greater than 1-2% a year. Most Americans found this manageable by diversifying where they held their deposits. Also, they did not suffer when they buried their gold-backed money in their back yards or stuffed it in mattresses. The dollar was worth 50% more in 1912 than it had been a hundred years earlier.

In contrast, central bank bail-out of crony banks means that reckless and incompetent banks survive and prosper, while overall system risk continues to accumulate at the central bank level. Ultimately the entire economy may become vulnerable to a blow-out. As one example we face today, rather than reform the financial system after the Long Term Capital Management melt-down of 1998, the Fed has continued to bail out banks which have now accumulated derivatives amounting to something over twenty times the size of the U.S. economy. Fed Chairman Ben Bernanke has also declared publicly that he is prepared to inflate the dollar without limit, and as of March 2006 discontinued reporting M3. All of this is very scary. More on all this later when I discuss Vincent LoCascio's excellent book Special Privilege.

What-me-worry so long as I can deal, deal, deal

We need to get a sense about how the political hack helps to spread corruption. Once the public gets conditioned to accept more government interventionism, it becomes a smaller step towards social democracy where the public corrupts itself by accepting ever more social welfare programs. Now instead of working to get kickbacks from narrow business interests, the demagogue works to get kickbacks from the under classes who he buys off by spreading pork to them. In reality, the demagogue is stirring up forms of financial civil war and class warfare.

Once one uses the coercive power of government to redistribute wealth, in essence one group of citizens is using government to raid the pocket books of other groups of citizens. Whether it is done discretely behind the scenes with IRS forms, or done in a crude manner by government troops with fixed bayonets (or French Revolutionary pitch forks and pikes) — in the final analysis it is all pretty much the same thing.

James Madison once wrote that there has never been a democracy that did not murder itself. Once government becomes Santa Claus to both special business interests and the general public, it becomes hard to take back the pork. If anything, pressure continually builds in the opposite direction to provide ever more pork and ever more special privileges. Major portions of the public lose their self-sufficiency and become emotionally and financially dependent on Big Brother government. They become ever more willing to vote for more government to try to solve the problems created by government in the first place. The nonproductive and dependent sector of the economy steadily grows. Meanwhile, growth in government squeezes out increasing portions of genuinely competitive, private entrepreneurial infrastructure.

It is the competitive private sector that can survive and thrive without special privilege that creates most of the real jobs and wealth. As the productive sector steadily shrinks, and the nonproductive sector steadily grows, we can now clearly discern a full blown and ultimately self-destructive parasitic ponzi system.

From Ponzi Government to Evil Government

Ponzi government, as bad as it is, tends to be relatively passive. It thrives in the gray zones where people either do not know or do not care about long term vs. short term tradeoffs in public policy issues. While it is indulgent and morally permissive, it is usually not violent and bloody.

Unfortunately, if not arrested in time ponzi government can turn into evil government. For people who study the true history of America, we have already had a fair taste of this since the Abraham Lincoln dictatorship. This is a situation where the government goes out of its way to artificially manufacture violent crises and kill people to simultaneously justify its existence as a protector and deflect blame from its own failings

In extreme cases, such as in the French Revolutionary Reign of Terror, the Bolshevik Revolution, or the Cambodian killing fields, government engages in mass butchery. However, most evil governments try not to go quite this far since it can undermine their tax base and seriously erode their public image. It is more typical for evil governments to try to hide their fingerprints by engaging in such games as "protection racket," "agent provocateur," "blame shifting," and "wag the dog" operations.

Games that Evil Governments Play

The protection racket

A classic example of a "protection racket" involves a gangster who hires a hood to vandalize a store. Then the gangster approaches the store manager to sell him his protection services from hoods in return for a cut of his business. This is true parasitism at play. Nothing of economic value has been created, and in fact the negative "make work" activities degrade real economic progress.

We may be experiencing an example on a major national political level in America today. Many American libertarians, such as Dr. Paul Craig Roberts, claim that America had no legitimate reason to invade Iraq. Sadam Hussein had no ties to Al Qaida and he had destroyed all his weapons of mass destruction. In addition, there were too many unanswered questions about 9-11, which I link to in my "Critical Issues" section. Therefore, the overblown threat presented to Americans to justify increased aid to Israel and increased expenditures for the military-industrial complex and a newly created Department of Homeland Security constitute a large-scale protection racket.

Agents provocateurs

A more complex variation on the political protection racket can be played with the old political game of "divide and conquer." Here is how it works: Find two factions that have money and simmering hostility. Use agents provocateurs to stir up trouble between them into open warfare. Then sell armaments and defense consulting advice to both sides. Make good money as you watch people destroy each other.

A good example is provided in By Way of Deception by former Mossad Agent Victor Ostrowsky, where the Mossad provided training to both government forces and Tamil rebels in Sri Lanka. He tells the story where troops from both sides happened to be undergoing training in Israel, and someone goofed in the scheduling and had them on the same military base at the same time. Ostrowsky said that the Israeli instructors had some tense moments when both groups were engaged in physical training one day on the same athletic field, and were running towards each other with a fence between them. Fortunately they did not recognize each other as they passed by.

Sometimes this game can be combined with another game called "reductionism." Here is how it works. First, find one side with money, and another side that is a potential threat. Use agents provocateurs to stir up open warfare. Work with both sides. The fact that you are not making money from either one or both sides is counterbalanced by the fact that you like seeing each side destroy each other. Ostrowsky talks about how the Mossad played this game between Christians and Muslims in Lebanon. As another example, in French history Cardinal de Richelieu of Three Musketeers fame was famous for the way he ruthlessly played his real or perceived enemies off against each other, often providing covert aid to each side. He kept hostilities simmering behind the Thirty Years War, which completely ruined his perceived rival Germany.

Blameshifting

A slick version of the agents provocateurs game is to attack yourself. Since ordinary honest people find it difficult to fathom government leaders who can sink so low that they are willing to kill their own people and destroy their own buildings, crooked leaders can blame the attacks on their enemies and frequently get away with it. This blame game gives them a justification to go into a warlike mode, which in turn can give them further justification to suppress civil liberties, stifle dissent, and aggrandize their power base.

In my Critical Issues section I discuss the strange anomalies behind the Oklahoma City bombing and the likely controlled demolition World Trade Center Tower collapses.

Many thinking Americans believe that the Oklahoma City bombing was not only intended to falsely discredit the militia movement in America, but also act as a dress rehearsal for 9-11. They also believe that 9-11 was fabricated to falsely blame Arab militants and create a pretext for America's invasions of Afghanistan and Iraq.

Wag the dog

In the "Wag the Dog" game, government starts hyping perceived threats to a crisis level in order to deflect attention from problems on the home front. . This phrase comes from a fictional movie based on a widely held public opinion that President Clinton ordered some cruise missile strikes against alleged Al Qaeda sites in Afghanistan and increased air attacks on Iraq in an effort to deflect attention on the home front. He faced impeachment over what he got caught doing on the carpet of the oval office with his Jewish intern Monica Lewinsky.

When "Wag the Dog" involves creating a war somewhere, it often gives political leaders an excuse to clamp down on dissent at home. Both the U.S. and Israel have basket case economies, and their leaders may require "wag the dog" to not only to deflect attention, but also to try to save face if either or both economies go into hyperinflationary meltdown.

Decentralization as a remedy

Libertarians are quick to point out that unscrupulous gamesmanship seems to correlate with increasing size, power, centralization, compartmentalization, and levels of management in government. Few Americans grasp that the same problems and solutions that apply to excessive business centralization can also apply to government.

The vast majority of universities teach macroeconomic theory that justifies a busybody central bank, big government intervention, and corporate central planning. This theory is disconnected from microeconomic theory and business realities. In fact, in his lectures, the late Austrian economist Dr. Murray Rothbard commented that while "microeconomic theory is in good shape," in contrast, "macro economic theory is screwed up."

We can find numerous historical examples where political secession has been handled in a calm, peaceful, and mutually successful way.

Earlier I mentioned how America's mother country, Britain, decided to handle her other "children" after the American Revolution. By granting Canada, New Zealand, and Australia complete autonomy, these countries have reduced layers of government and have become more responsive to their own internal needs. At the same time, they have enjoyed favored trade relations with the mother country and have rallied to her defense in time of crisis.

Sometimes after growing up, leaving home, and becoming self-sufficient, the children can help the parents in return.

Another good example involves the Scandinavian countries. Dr. Lothrop Stoddard, in his classic work Racial Realities in Europe, talks about how Norway demanded independence from Sweden in 1905. At first the Swedish leaders considered armed invasion, since Norway had only half Sweden's population. Contrary to some popular stereotypes about Nordic berserker rage, Stoddard points out that these Nordic leaders in actuality showed tremendous level-headedness and sensibility. They decided to let Norway go peacefully. Stoddard observed that this level-headedness and chivalry is all too often absent in other places in Europe, particularly the Balkans.

Today Norway and Sweden are the best of friends on many levels, proving that political secession can be reversed over time and replaced with warm friendship on many different levels of sovereignty. On many economic levels, Norway and Sweden act as if they are still the same country. A Norwegian citizen can cross over into Sweden and work in any job, and vice versa. Both countries also cooperate on a national strategic level. As one example, I am aware that both Norway and Sweden shared the cost of hollowing out the interior of a mountain to store strategic petroleum reserves.

I personally think that the policy of peaceful secession rather than forcing unity at all costs was good for both countries. For starters, they are both relatively small countries, and could hardly have afforded a war that might have turned into a very costly fratricidal conflict. Secondly, the secession helped bolster the distinctive Nordic national identity and pride of each country.

Prior to the demand for independence, Norwegian nationalism got a shot in the arm from the unearthing of Viking ships in burial mounds. Norwegian nationalism and consciousness of an ancient shared heritage has helped to provide a check against excessive Swedish cosmopolitanism which in turn has helped to preserve the Swedish national identity.

For all the problems that Norway and Sweden are suffering today from Third World immigration, to include the complete takeover of certain Scandinavian towns by dark aliens, the swamping of the welfare system by swarthy hordes, and the ten to one hundred fold increase in rapes of Nordic women in various multiracial areas, I believe that the problems would be only that much worse today if Sweden had kept Norway united through military conquest and then saturated the Norwegians with anti-national, integration propaganda. The anti-nationalistic poison that the Swedes might have dumped on Norwegians to forcefully integrate them into their society would have ultimately blown back on themselves.

There are other examples of peaceful secession between Nordic countries worth mentioning. In 1945 Iceland asked Denmark for independence. Denmark responded by basically saying in effect "God bless you and good luck," and even sent a naval destroyer to return to Iceland from its national archives original manuscripts of medieval Icelandic sagas. Similarly, Sweden has historically been respectful of Finnish requests for more autonomy.

One might argue that secessionism has actually been fairly normal and even desirable in the history of Nordic and closely related Celtic peoples, to include Dutch secession from the Spanish Empire, and periodic bouts of Scottish and Irish secession from the British. One might argue that the way the South was handled just before, during, and after the War Between the States was tragic, vicious, and abnormal by many historical standards, and has provided a basis for many of the major problems we face today.

The U.S. Government has granted independence to the Philippines, but in the current political environment it is hardly likely it will consider granting peaceful secession to Idaho, Montana, New Hampshire, the South, or any other state or region.

Although the War Between the States originally started over very legitimate Southern grievances regarding tariffs and state's rights, Lincoln deliberately entangled these issues with the slavery and white vs. black racial relations issue to create a horrible neo-Jacobin ideological mess. The United States became the only major "civilized" country in the 19th century that was incapable of resolving its slavery problem in a peaceful manner. France, England, Brazil, and others did it peacefully, but America had to destroy half the wealth of the South and kill 640,000 of its finest. I would invite the reader to visit the King Lincoln archives at www.mises.org as well as more of my own commentary related to this topic in my History Reinterpreted section.

Decentralization regarding the financial system

It is very important for Americans to understand the difference between "natural" (or "free market" or "libertarian") forms of money and credit, and "dictated" (or "fiat" or "centralized") forms of these same things. This is very important both in order to understand American history as well as to grasp the underlying nature of America's current financial crisis.

Unfortunately in America today, its controlled media tends to frame all economic debate within a relatively small conceptual area by historical standards. We typically hear about such "modern" schools of economic thought as monetarism, Keynesianism, and supply side economics. What all these schools have in common is a fervent belief that it is highly desirable for Big Government and a big central bank to actively manipulate a "dictated" (or "fiat") money system. People who dare to suggest a natural money alternative, completely divorced from government and central bank coercion and manipulation, are often treated in a very condescending and disrespectful manner by the controlled media.

Interestingly enough, America's economy successfully ran on a natural money system during major periods of its history. "Natural money" simply means the medium of exchange that evolves naturally in a free enterprise system when private citizens are free to chose whatever they want to use as money without any outside coercion, restriction, or manipulation by a government or a central bank.

Historically, gold and silver have generally tended to emerge in various societies around the world as the "natural money" of choice. This is because gold and silver have always exemplified all the best characteristics people have desired in a medium of exchange. These precious metals are always very limited in supply (mines can never add more than 5% a year to global supply). They also have practical use for jewelry or as industrial commodities, are infinitely divisible, are always uniform in quality, are highly transportable, and are virtually indestructible.

Natural money systems not only involve the use of items that have intrinsic value such as gold and silver as a medium of exchange, but also for the sake of convenience, the use of warehouse receipts for any other items that also have intrinsic value. As an example, colonial Virginia used warehouse receipts for a pound-of-tobacco as money. In the coinage act of 1792, the U.S. dollar was specifically defined as 371-/4 grains (troy) of fine silver. The exchange rate of gold and silver was fixed.

Banks in early America essentially served as warehouses that held gold and silver. Dollar bills were essentially warehouse receipts for these holdings. Actually it was not quite this simple, since banks tended to keep only about 40% of their deposits in gold reserves or their silver equivalents rather than maintain a 100% coverage ratio. However, in the 19th century one could still walk into just about any bank and exchange his dollar bills into gold and silver coins at will.

Today, no one can walk into any bank and swap Federal Reserve Notes (what we call "dollars" today) for gold and silver coins. In fact, it is illegal to use gold and silver coins to buy common goods in retail stores. If you need to exchange gold and silver coins into cash, you must first visit a coin dealer.

The Federal Reserve Notes (FRN) you are required by law to use as legal tender are not backed up by anything except the police power of the state that forces you to use it. This is why it is called a "fiat" currency. ("Fiat" means "dictated"). It is also backed up by a broader intangible, namely public "confidence" that our politicians and central bankers are not going to completely debauch the value of the fiat money system any time soon.

In contrast to our "modern" system, Americans in the 18th and 19th centuries not only routinely transacted with gold and silver coins, but also frequently used foreign coins such as Spanish silver dollars, Brazilian coins, and French silver crowns and livres. According to one source, 80% of specie circulating in America in 1800 consisted of foreign coins. (p. 67, Rothbard, History of Money and Banking in the U.S.). In fact, Americans were often jealous of their free market money. For example, when Abraham Lincoln tried to get Californians to accept his "greenback" paper dollars in lieu of their gold and silver coins to help finance his war against Southern Independence, the Golden State folks basically told him to bug off. However, they did not go so far as to secede.

Since the creation of America's privately owned banking cartel called the Federal Reserve in 1913, America has gone over completely to a "fiat" or "dictated" financial system. In 1933, the U.S. Government even went so far as to confiscate privately owned gold, although thanks to some strenuous grass roots activist efforts it restored the right to own gold in 1975. In addition, bank gold reserves today are often lower than 1%. Banks are free to create loans out of thin air based on a fractional reserve system in which they often require less than 10% deposits to back them up. Most of these deposits consist of fiat money rather than gold and silver. Hence, we face a situation today consisting of mainly fiat money deposits backing up other fiat money deposits. America is essentially floating on a giant, rapidly expanding sea of paper secured by nothing except "confidence" and police power.

As an aside, I need to alert the reader that while what I have said is true in terms of broad generalities, there are certain historical exceptions and nuances that I have left out to try to keep things simple for introductory purposes. For example, in an effort to handle the tremendous financial burdens of the American Revolution, War of 1812, and War of Southern Independence, the U.S. Government saddled itself with various paper money regimes and de facto central banking schemes. However, by 20th century standards, these things were relatively temporary. Eventually things reverted back to hard money systems. Also, the banking system in America was not always totally "hard." Not surprisingly, many "wild cat" banks in the "Wild West" frontier resorted to wild and wooly banking practices. Nevertheless, by 20th century standards, American banking generally remained relatively "hard," privatized, and decentralized.

I think a good way to understand the differences between these two very approaches to money and credit is to examine them on an ethical level and also in terms of the short term vs. long term tradeoffs of decentralized vs. centralized systems.

Before we delve deeply into the monetary issue, we must first examine ones fundamental attitude towards government. As I explain in my mutualism vs. parasitism section, republican government evolved as a remedy against tyranny,. This means creating a political system designed to resist rule by cruel, arbitrary, capricious, incompetent, irrational, or insane decrees by a very limited number of specially privileged individuals.

Republican government implies decentralization of political power out of the hands of one person or a small clique. It also implies checks and balances. It also implies adherence to consistent standards, and open disclosure and open discussion of policy issues.

Therefore, if your government is going to inflate the currency, this can have some very nasty implications regarding basic republican principles. Inflation is an indirect form of taxation. It destroys the purchasing power of the common citizen just as much as if he had been taxed. Therefore, if you believe in taxation only with representation, and if you believe strongly that all important policy issues must be subjected to open public debate, then you must believe that every decision to inflate the currency must be thoroughly scrutinized by the citizenry and their elected officials and must be subjected to a full legislative process before ever being implemented.

This is exactly what we do not have in America today. In fact, in March 2006 the Federal Reserve Chairman, Ben Bernanke, told Congress that the Fed no longer feels that it needs to report the growth in M3 monetary aggregates created by the Fed itself.

When Congressman Ron Paul dared to ask why the Fed would dare to do this, he was arrogantly told that it was simply to expensive for the Fed to bother to keep track of its own policies. What is really pathetic today is that Congressman Ron Paul is one of the very few Congressman with the economic literacy and loyalty to the Constitution to even dare to ask this question.

The Fed is currently inflating the currency at over 10% a year. In fact, it has been doing this every year more or less since 1995. This means that Americans are effectively taxed over 10% a year (in addition to their other taxes) not because of any legitimate republican legislative process, but because of the way some very small clique of central bankers operating behind closed doors might decide to help out their political buddies or because how of they might they feel after an all-night party when they pop some aspirin and shift their rear ends in their chairs a certain way.

At the opposite extreme to all this is a gold and silver backed hard money system of the 19th century. During much of this period, money was kept out of the hands of central bankers and the government.

Since gold mining companies can rarely add more than 5% a year to the total world gold supply, under a hard money system there is almost never a danger of serious inflation that can tax people without representation or rob them of the value of their savings. In fact, under the gold standard, the dollar could buy 50% more in 1913 than it could a hundred years earlier (despite a bad bout of inflation of Lincoln greenbacks during the War of Southern Independence). The British pound, which had not experienced such wartime distortions, could buy 100% more for the average British citizen at the end of the same 100 year period.

The French philosopher Voltaire once commented that paper money always returns to its intrinsic value, which is zero. Throughout history, the general pattern has been that central bankers and politicians have always abused their fiat money privileges and completely debauched their own currencies.

In regard to the ethical issue behind all of this, the ability of central bankers and politicians to cheat the public is so great under any fiat money system that in his book The Gold Wars, former Rothschild banker Ferdinand Lips commented that when most European nations went off the gold standard at the beginning of World War One, one prominent banker commented that this signified "The end of honor."

In the final analysis, in economics there are no free lunches. Someone always pays a price for the consequences of economic policies both in the short run and the long run.

In a hard money system, no one even attempts to give out any free lunches. But then again, this reluctance to cut corners is simply an honest statement of economic reality. In contrast, in a fiat money system, certain insiders use their inflationary power to slip "free lunches" to their political buddies. At the same time, they pretend on the surface that the system is honest in order to maintain public confidence. But in reality, we see that this system is really very crooked.

An inflationary fiat system resembles a ponzi game, where the first people to spend the inflated dollars get the full benefit of their purchasing power. However, as these added dollars slosh around the economic system and inevitably drive up prices, the people left holding the bag are common citizens who must now pay higher prices for goods without any increases in their paychecks.

This brings us to the issue of short term vs. the long term trade offs. In the short run, a fiat money system can initially make life easier for many people in society, because the circulation of extra notes can help stimulate additional demand for goods. However, we need to bear in mind that this additional spending usually comes from government bureaucracies or the additional credit created under a fractional reserve system by bankers. Government bureaucrats and reckless bank loan officers handling hot money are typically the least competent people to be making wise investment decisions. Typically the most competent people in an economy to make investment decisions are entrepreneurs, small businessmen, and industrialists in the heartland. These people include scientists, engineers, and inventors who create the steady flow of innovation that is absolutely vital to sustain the automation revolution and continually drive down prices with more advanced manufacturing methods and improved devices. Therefore, we can already see how a fiat money system starts to shift economic decision-making power out of the hands of successful entrepreneurs and other savvy businessmen and inventors in the heartland and towards relatively arrogant, selfish, and stupid bureaucrats and bankers based in places like Washington D.C. and New York City.

Typically the stimulus created by the bureaucrats and aggressive bank loan officers does more to distort the economy than provide a basis of solid, sustainable growth. Over the long run, this artificial stimulus created by inflating the money supply or increasing credit under fractional reserve lending system becomes comparable to a person who relies on junk food to satisfy hunger or a drug addict who needs his usual dose to avoid withdrawal symptoms. Furthermore, easy money systems tend to encourage easy values, where people take hot money and put it into highly speculative enterprises designed to produce quick gain from changes in market psychology that are completly delinked from underlying economic fundamentals.

With a hard money system, things are admittedly a little bit tighter in the short run, but in the long run it is infinitely more honest, stable and healthy. A hard money system places the full burden on making prudent business and other investment decisions on the local entrepreneur, industrialist, and other businessmen. If they screw up, they pay the price, even if it happens to be a hard price.

Hard money systems tend to encourage hard values focused on savings, thrift, and prudent foresight. They tend to be focused on building real businesses that provide real products that provide real services.

I personally believe that in the long run, a hard money system is the only system that is fully compatible with republican principles. Republicanism essentially means decentralizing all the hard issues of carrying on the affairs of state on to the shoulders of common citizens. If people on a grass roots level have adequate character, intellect, and education, then decentralization is vastly better way to go compared to consolidating all power into the hands of a very few.

Similarly, since natural or "free market" money systems imply decentralized economic power, why would someone who favors decentralized political power not also favor the same thing on an economic level?

Decentralization regarding central banks and military alliances

Before leaving the centralization vs. decentralization debate, we need to spend more time talking about central banking. This is critical, because centralized banking has provided the financial rocket fuel necessary to greatly accelerate political and economic centralization — and corruption — everywhere else in America. It is also critical because the system now threatens to create a hyperinflationary economic meltdown in America that will impact everyone.

First, we need to really question the entire underlying philosophical basis for the Federal Reserve Banking System which currently threatens to totally debauch our currency. We also need to understand the role that it plays in ponzi politics and in exacerbating rather than reducing "system risk."

Secondly, after dealing with the central bankers, we need to deal with some military-industrial complex sacred cows in the "system risk" topic area as well.

Let me go back through an overview of central banking. Please pardon me when I repeat some points made earlier in this article.

Back in the early 1800's American currency was usually tied to gold and silver. Approximately 40% of bank reserves had to be secured by precious metals. It was common to pass gold and silver coins back and forth through a bank teller window. People believed correctly that when money is delinked from a hard asset and placed in the hands of politicians and central bankers, that they tend to abuse their "license to print money" and ultimately drive the value of paper money to the ground. We are back to the famous saying by Voltaire that fiat money tends to always return to its intrinsic value — zero — since putting fiat money in the hands of politicians and central bankers is like handing the keys to a liquor cabinet to a gang of alcoholics.

Therefore, it was wrong to have a central bank except for use as a wartime emergency. People preferred a highly decentralized system, where local banks were allowed to fail rather than getting bailed out by the government or a central bank.

According to Dr. Murray Rothbard, the bank failure rate in the 19th century averaged only about 1-2% a year at most. People usually managed around bank failures by keeping their money deposited in multiple banks. Also, since their gold and silver-linked money tended to steadily appreciate over time, it was a lot easier to store it in places outside of banks, to include the insides of mattresses and chests buried in the back yard.

Another important point about these supposedly archaic, bad old days of "tight money" that tied dollar bills to such "barbaric relics" as gold and silver is that America experienced real economic growth rates of around 4-5% a year during times of peace. This was well beyond the average growth rates experienced during the more "enlightened" fiat-money era of easy monetary and credit expansion in the 20th century.

A third point is that the banking industry used to be much more honest and understandable for people. The underlying reality used to be that when one gave his money to a banker to get interest income, he took the banker in as a business partner. In return for storing his funds and finding a qualified borrower, the banker shared the interest income with the depositor, net of the banker's expenses and default losses. Since banks typically have most of their funds loaned out, bankers typically have to finesse paying out cash to people who make withdrawals. Normally depositors knew this and had no incentive to destabilize their own hometown bank with a bank run unless they had solid grounds to believe something was really wrong. Conversely the banker had every incentive to earn a public reputation for rectitude to forestall such a run.

The position of a head banker is one of the most sensitive in society. A crooked banker can create loans out of thin air based on reserves he does not have, and then use his ill-gotten wealth to buy off politicians and police. This is the easiest and most lucrative form of theft on the planet. Meanwhile, other bankers are always struggling to maintain public confidence to prevent a run on their own banks. On the one hand they do not want to unnecessarily alarm the public, but on the other hand it is an extremely dangerous sign of moral decadence when the business leaders in a society allow aliens and crooks to gain a beachhead inside their banking system.

Perhaps one of the greatest breaches of national security among Western nations in history took place during the Napoleonic wars. This took place when the Rothschilds and other extremely wealthy Jewish families were able to stage a silent coup de etat using their sinister advantages. They held in-bred mafia-like tribal loyalties, a tremendous capacity for covert intelligence operations, and close ties with smugglers and other organized crime elements. Using these dark powers, they were able to make very daring financial manipulations of gold reserves and falsified credit. These Jewish families had already gained important access to various ruling aristocracies in Europe, and now under the cover of war time "necessity" they were able to pull off collosal banking swindels. A particularly famous example involved smuggling gold across France to pay off British soldiers who were fighting Napoleon in Spain.

During the 19th century they got away with their incredibly nervy crooked manipulations. They parlayed massive funds created out of thin air through bank confidence games into real holdings in companies. They also used their riches to buy political influence and social position. John Reeves described in The Rothschilds: the Financial Rulers of Nations how they embedded themselves inside central banks of many nations of Europe and became more powerful than many European monarchies.

This provided a base to expand international financial manipulation and political thuggery to new levels, such as genociding innocent Dutch-descended Boer women and children, saddling America with its privately owned Federal Reserve Banking System in 1913, and funding most of the Bolshevik Revolution. The big money center bankers in the 20th century became particularly ingenious at taking their risks and pawning them off on the government and ultimately the taxpayer. They have also become also very ingenious about creating false public impressions and confidence that hide underlying economic realities. Last, but not least, they certainly have not lost their chutzpah, whether it has involved saddling Russia with kleptocrats, assassinating President John F. Kennedy (cf. Final Judgment), "pulling" 9-11 controlled demolitions, or high jacking American policy to fight wars in the Middle East (cf. High Priests of War).

Creating real wealth as opposed to scamming it from the financial system

For the moment, let us review the basics regarding how real wealth is created in society.

The most critical factor in solid economic growth is competent entrepreneurial calculation. This means competently developing, evaluating, and executing business plans that focus on the creation of real products and services. This in turn means delivering a "value proposition," in which businesses learn how to profitably deliver products that provide a superior ratio or quality to cost to consumers. The entrepreneur takes the risk that in the process of executing his business plan, market demand for his products will be adequate to profitably cover his costs of operation.

It is very helpful to have a stable currency to aid the process of entrepreneurial calculation. This helps the entrepreneur be more accurate in forecasting revenues and costs looking into the future. It is also helpful for the free market to determine interest rates, because this gives the entrepreneur more accurate information about the time value of money and real rates of inflation.

Real wealth creation also means having a large community of people who can support each other in principled free enterprise competition that should ultimately create wealth for everyone. Business competition should be tough enough to reward excellence and promote meritocracy, but chivalrous enough so that businessmen are allowed to specialize and prosper at what they do best in an ecology of business relations that ultimately create more wealth for everyone.

Lastly, real wealth creation requires the honest informational feedback system of a free market. I mentioned earlier how central planners are incapable of operating complex systems. All of this in turn implies that the private sector must retain overwhelming control of the economy and national wealth.

In contrast to this focus on specific products, specific business relationships, and maintaining free and honest markets, central bankers use an macro-economic shot gun approach where they manipulate interest rates and the money supply. They end up distorting all of the basic elements of real wealth creation. Rather than allow the free market to set interest rates, they distort free market feedback signals by arbitrarily raising and lowering interest rates. They undermine currency stability by steadily inflating the money supply, and they undermine credit system stability by expanding and contracting credit under a fractional reserve system. The Mises Institute offers an excellent video that explains all these things in greater detail titled "Money, Banking, and the Federal Reserve."

I have already explained why government officials are incapable of creating real wealth, and how excessive government growth and intervention tends to act as an economic parasite over the long run. It is no different in regard to the individuals who run a central bank.

Despite all of this, both the influence of America's government and central bank have increased mightily for over nine decades.

It really makes one wonder about the character of the people in charge of these entities. After the reader performs his own in-depth research, he might conclude as I have that the word "criminal" is hardly too strong. One might even begin to conclude that America has been led by very selfish, unprincipled people behind the scenes with alien interests who have been out to ruthlessly exploit the general population.

The sad history of America's current central bank

Following the creation of the Federal Reserve Banking System in 1913, two very critical things started to happen.

First, banks started dropping their required reserves. Throughout much of the 19th century, banks backed up about 40% of their deposits with gold. Now gold reserves were being dropped towards the single digit level. In fact, within a few decades gold was completely replaced at most banks with Federal Reserve paper.

Second, banks started to become very aggressive under a new fractional reserve system. This meant that they started lending out many multiples of whatever deposits they had on hand. This in turn meant that they could collect interest on loans that they created out of thin air which were in excess of deposits. This also meant an aggressive expansion of the money supply during the First World War and Roaring Twenties era.

Aggressive money expansion typically fuels speculative investment, which in turn tends to fuel overly leveraged investments, mal-investment and economic distortion. At some point the need to write off mal-investment coincides with a recessionary credit contraction.

As a defense against a sharp recession, the Fed was supposed to step in and bail out problem banks as a "lender of last resort." This was one of the features of the Federal Reserve Banking System that Paul Warburg and his allies sold to Congress in 1913. In actuality, the Fed was highly selective about who it helped during the ensuing credit implosion. According to Vince LoCascio in Special Privilege (p. 95):

The first opportunity the Fed had to be a lender of last resort occurred during the 1920s. In 1920, there were 23,000 banks in America. In 1929, there were only 18,000. In the interim 5,700 banks failed and less than 1,000 new ones were formed. In other words, about one out of every four banks failed during the 20s — the first full decade after we instituted the lender of last resort! During the 50 years of the reputedly ineffective National Banking System, only in 1893, a panic year, did more than 300 banks fail in a single year. From 1921 through 1929, during supposedly good times, an average of over 600 banks per year failed. Even in the best of those years (1922) 367 banks failed. From 1930-33, over 9,100 more banks failed, producing a 50% reduction in the number of banks in a four-year period. As lender of last resort, the Fed was an even more miserable failure than as a source of monetary stability.

Instead of saving America from sharp business cycles, bank centralization instead set up America for the nastiest depression in its history by first fueling excess monetary and credit growth in the prior two decades. This preparatory bout of massive inflation was part of a broader, more complex international story in which the U.S. Federal Reserve sought to accommodate the needs of the Rothschild-controlled Bank of England, which sought to restore the old global strength of the British Pound relative to the dollar in the aftermath of Britain's ruinous World War One inflation. This was certainly not part of any kind of "America First" policy.

Rather than stabilize the currency, as was promised when the Fed was created in 1913, the Fed has instead eroded over 97% of the value of the dollar since inception.

The centralization of credit has created all the same problems I have described with other centralization ploys. First, it has reduced accountability and decoupled performance from returns. In the 1800's, if a local bank officer screwed up, his bank went under. Bad bankers paid the price at the local level. Under the Fed, incompetent bank officers get bailed out and hang around. Their lousy loans ultimately get bailed out by an increase in the money supply or by government bailout (as in the case of the S & L crisis of the late 1980's). Either way, whether through inflation or direct government subsidy, it involves some form of subtle or direct taxation of average Americans.

Predictably, centralization has also created a byzantine nest that is perfect for unscrupulous people to game the system to their advantage. The economist John Kenneth Galbraith commented in 1975 that "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or evade truth, not to reveal it."

In Special Privilege: How the Monetary Elite Benefit at Your Expense, Vincent LoCasio summarizes special privileges that no other industry in America can remotely match. I have provided his list from pages 199-200 in boldface below, and have added some of my own comments.

.....1. Money creation: The right to create "money" out of thin air was given by the original Constitution to Congress, not to central bankers, but today only the bankers have the privilege of creating money. The Fed Chairman used to be kind enough to inform Congressional representatives about money creation numbers after the fact. After March 2006, the Fed no longer reports M3 growth to its camp followers on Capitol Hill. (Fed chairman Ben Bernanke told Rep. Ron Paul that it is now too expensive to keep records!) Of course money creation without prior scrutiny and approval by people's elected representatives is a form of taxation without representation since it takes purchasing power out of the hands of taxpayers just the same. To add insult to injury, under a fractional reserve system, "...banks are then allowed to create multiple dollars of liabilities against themselves for each dollar of Federal Reserve Notes that they have." (LoCascio, p. 199).

.....2. Asset protection (discount privilege at the Fed) According to LoCascio, (page 199) "If the Fed so chooses, it can guarantee the assets of any bank by buying the banks's assets at their time adjusted face value. Since the Fed has an unlimited ability to do this, no bank, no matter how poorly managed, can ever fail if the Fed merely chooses to rescue it. To date, the Fed has favored taxpayer bailouts, instead. The effect is essentially the same." I might add that when member banks start to get into trouble, the Fed can also drop the discount rate at which banks borrow money from the Fed. Banks and take this money and loan it out at higher rates. Their loan rates typically decline less than the discount rate. This is particularly true of credit card interest rates. All of this means increased profitability for the banks. In other words, this is a cartelized industry whose head can arbitrarily provide guaranteed increases in profit margins. This creates moral hazard by encouraging even more reckless lending, which in the long run increases financial system instability and the likelihood of deep recessions once the need to write off bad debt and mal-investments inevitably leads to a credit squeeze.

.....3. Liability protection (FDIC coverage), Started in the 1930's, "deposit insurance" was raised well ahead of the rate of inflation to $100,000 per account in 1980. No doubt "deposit insurance" sounds wonderful and "common sense" to the average person at first sight, but we need to remember that over the long run in economics, there are never any free lunches. This "insurance" is actually a taxpayer-guaranteed bailout. The losses typically come from bad loans created by reckless or incompetent loan officers. The perversity comes from the fact that whenever a bank can slap on the FDIC label and simultaneously offer the highest interest rates — no matter how speculative the underlying loan portfolios are in nature — this bank will typically bring in the most assets while luring assets away from more prudent portfolios... This also helps accelerate the trend where loan officers are no longer likely to carefully select and monitor borrowers in their local communities, but instead they quickly package and swap loans among other financial institutions in an impersonal way. This decouples loan origination officers further from direct responsibility and accountability and adds even more system risk. As a consequence of all this, FDIC "insurance" has actually increased the long term failure rate — as well as the mega-sums involved in taxpayer-funded bailouts. One of the biggest recent whoppers was the Savings & Loan industry bailout of the late 1980's that cost taxpayers over $160 billion dollars.

.....4. Rescue missions (bailouts and the like) Banks have become so powerful that "too big to fail" often means too big to be missed by Congressmen who depend on their campaign contributions and junkets. LoCascio summarizes on page 200: ""Various taxpayer bailout schemes permit the banks to pay no attention to the risk of any enterprise — no matter how stupid — particularly if they all act in concert with each other. By acting together — whether it is lending to Mexico, South-East Asia, Donald Trump, or Long Term Capital Management — they can virtually guarantee they will be rescued if things go wrong."

.....5. Accounting irregularities According to LoCascio (p. 200): "Accounting rules allow banks, and only banks, to carry investments at acquisition cost when the current market value is lower. This unquestionably perverts the bank's true financial health. No rationale for this is plausible. Other rules are similarly perverse and distort reality. In addition, regulatory bodies and politicians intervene with their own irregularities whenever such intervention is required to protect these inherently unsound and unstable institutions."

.....6. Secrecy rules According to LoCascio (page 180),

Some special privileges relating to secrecy were built right into the original Federal Reserve Act of 1913. For example, the act provided for a body called the Federal Advisory Council (FAC). Directors of the Boards of the Federal Reserve Banks select the members of FAC. Today, FAC members consist of the top management of banks whose combined assets exceed $1 trillion. These members meet regularly with the Board of Governors, in secret and without oversight, to air their concerns and provide advice. No other regulatory agency meets in secret like this with the entities it regulates.

Other special treatment relating to secrecy was built into subsequent legislation. For example, most federal employees are provided whistle blower protection for revealing criminal or fraudulent activities that they come across in the conduct of their jobs. Bank examiners, however, were specifically denied such protection within the provisions of FIRREA — and act supposedly dedicated to bank reform.

If all of this is beginning to sound like a big scam, well, join the conspiracy theorist club. None of this should be a surprise for anyone who has read about the real history of the Fed. An excellent and extremely well-written primer is The Creature From Jekyll Island by veteran investigative journalist G. Edward Griffin.

The Fed was a the brainchild of Paul Warburg, a Rothschild agent who got together with Morgan and Rockefeller interests (themselves confederates of elite Jewish banking families) to adapt European central banking schemes to America. The reality of their system today has become the exact opposite of the decentralized financial system championed by American patriots such as Thomas Jefferson and Andrew Jackson.

Centralization has led to exponential increases in total system risk. For starters, the Fed has completely abandoned all 19th century standards of rectitude regarding sound money and credit. Unfortunately under "globalization" other foreign central banks have followed the Fed's leadership, creating a massive global problem rather than just a U.S. problem.

Ever since the Nixon Administration de-linked the dollar from gold in 1971, the entire industrialized world has headed down the path to our present situation where the entire world is floating on nothing but a sea of fiat-money paper.

Worse still, not only has the international community abandoned gold as an anchor point for currency exchanges, but in the place of gold it has substituted unregulated derivatives as devices to hedge currency and other forms of risk. Billionaire investor Warren Buffet has referred to these derivatives as "Weapons of Mass Financial Destruction." They have swollen to over $200 trillion, or over twenty times the size of the U.S. economy.

In contrast the old gold system was simple and robust. It was based on the intrinsic worth of gold itself, and carried no implosion risks.

Derivatives are nothing but paper contracts designed to hedge against uncertainties. Many market professionals are gravely concerned that if a market crash turns into a panic, many of these instruments can become completely illiquid. We saw a good example of irrational market behavior during the Russian default and Asian crisis in 1998. Investor behavior fundamentally changed much like the way water turns to ice with the right reduction in temperature. Normal trading ranges between many financial instruments evaporated or even became inverted, leading to massive losses. One of the worst hit hedge funds was Long Term Capital Management, which had been founded by several nobel laureates. This failure threatened to wipe out some major banks before the Fed intervened with a bailout program.

So many major U.S. money center banks and large corporations are now loaded with debt and derivatives that their capital structures resemble hedge funds. The Fed has done nothing to curb the growth of unregulated derivatives. This is probably because hedge funds widely use them. These hedge funds aid Fed manipulation by using their instruments to transmit Fed short term rate reductions into long term rate reductions in bond markets. The hedge funds are also are significant customers for major Wall Street firms, who also enjoy an incestuous relationship with the Fed.

According to the report "Move Over Adam Smith: The Visible Hand of Uncle Sam" by John Embry of Sprott Asset Management in Canada, the major investment firms also receive massive infusions of funds from the Fed via its "Repo Market" which they use to manipulate major markets to the mutual advantage of both the Fed and the investment firms. I discuss all of this in greater detail in a paper I wrote in July 2003 about Fed desperation and intervention wizardry when I once worked as a full time stock broker and investment strategist.

As total system risk builds towards a final blow out, it remains a wonderful life on planet Krypton, U.S.A. for individuals near the top who enjoy high salaries, bloated consulting fees and lecture honorariums. It is also a criminally wonderful life for those within their confidence who can trade on inside information. In this world of fluctuating fractional reserve ratios and discount rates and other forms of central bank manipulation, there are all kinds of wonderful, sneaky opportunities for insiders to continuously carve out little percentages for themselves out of big pots of money and bury the evidence within piles of complex transactions.

In contrast, it is not such a wonderful thing for common citizens. The purchasing power of the dollar bills in their wallets will continue to decline towards zero as the Fed continues to use its money creation powers to bail out bad loans, shaky derivatives, disintegrating banks, blown up hedge funds, and other problems related to banker recklessness, incompetence, and dishonesty.

Overall, the damage done to America has been far greater than if we had continued to quarantine failure at a local level by allowing local banks to fail, as barbaric as that practice may seem. We would also be far better off today if we had stayed with a gold and silver based money system that remained out of the hands of politicians and central bankers, as primitive as that system may seem as well.

Personally speaking, I greatly prefer the relatively primitive but robust and thoroughly reliable precious metals-based financial system without a central bank or fractional reserve lending that characterized America in the 19th century to the hyperinflationary blow-out regime we are likely to see in the not too distant future.

Total system risk and military alliances

There is an interesting analogy between the way system risk is consolidated and magnified in the banking world, and the way "war risk" is similarly pooled and magnified today with America's entangling alliances abroad.

Initially, creating a lot of military alliances may seem like a great idea. After all, the more allies one has, the more likely it is that one might defeat an enemy.

However, creating large numbers of entangling alliances can appear threatening to foreigners. In the longer term, it may encourage the creation of larger counter alliances among potential enemies than would be the case without making provocations.

In addition, once large entangling alliances are created, it is much easier for a relatively small localized war to suck in other, entangled powers, and quickly escalate into a major war. The Balkans conflict that ignited World War I is a prime example.

Dr. Hans-Hermann Hoppe points out that during the Middle Ages, when Europe was much more fragmented, the wars tended to be much smaller, more localized, and more likely to be fought by professional armies. As mentioned previously, the European countries tended to be run by monarchs and their relatively small advisory councils. This "privately owned" government had a much greater sense of long term caretakership. They were far less inclined than social democrats to agitate, regulate, mobilize, or socially experiment with their own people.

In contrast, in our so-called modern era of social democracy, countries are more likely to fight "peoples wars" or total wars with mass conscript armies. Social democracies typically bribe the loyalty of their mass citizenry for war through social security legislation and other benefits, hence the meaning of "welfare-warfare" in the phrase "neo-Jacobin welfare warfare state" that libertarians use to describe America today.

Contemporary social democratic governments have central banks whose fiat currencies can be readily inflated to help fight total wars to complete national exhaustion. Social democracies have proven every bit as much, if not more adept than the old constitutional monarchies at using alliances to escalate conflagrations, even to the levels of World War II.

Incidentally, the American social security system was largely inspired by German Chancellor Otto von Bismarck's social benefits system. Bismarck openly defended his system as a tool to politically bribe workers within the unified German state into feeling a sense of obligation towards military service for his imperial war machine. He also wanted to head off progressivist platforms by implementing his own social programs. This is one of the ways that "welfare" and "warfare" government spending originally fit together.

Also, getting back to my discussion of ponzi government and evil government, the existence of entangling alliances and a large standing military typically present a chicken and the egg problem. Major media condition us to think that first there is a legitimate threat, and then America goes looking for alliances as a second step to meet a real threat.

Many libertarians believe that the underlying reality is usually the reverse. They argue that the neo-Jacobin welfare warfare state goes looking for trouble first before reacting to it. The superstate needs entangling alliances and enemies as an alternative to undergoing the pain of downsizing government and the military-industrial complex. As one example, a number of Mises Institute lecturers claim that the CIA wildly over-inflated the Russian economy and military expenditures during the Truman Administration in order to help keep the American military budget artificially bloated.

Back to political separatism as a possible remedy

Dr. Ralph Raico, in his lectures on classical liberalism, believes that the fragmentation of Europe in the Middle Ages following the collapse of Rome was a good thing for the cause of liberty, because it preserved for people the right of exit to deter tyranny. With more countries competing against each, it was easier when things soured in a particular country for people to move to another country with better laws and tax policies. This put pressure on rulers to refrain from tyranny in order to retain productive people.

Dr. Murray Rothbard believed that if North America had divided itself into numerous independent countries, the wars that might have followed would have likely been relatively small and highly localized. In contrast, while united in megastates, Americans and Canadians have been sucked into very expensive large-scale wars overseas. Dr. Rothbard pointed out that it did not make sense that Americans would fight to save the union in order to save America from future internal wars when the price tag of 640,000 people killed seemed to be far greater than the likely costs of all the future wars in the next century that unionists were ostensibly trying to avoid in the first place.

In regard to entering World War I, a divided North America would have been less likely to have overwhelming gone over to either side. In fact, there is strong evidence that if America had stayed out of World War I, the European combatants would have declared an armistice by 1917 rather than fight on for nearly two more extremely bloody years. Prolonging the war cost millions more lives and vastly more treasure. It created the onerous Versailles Treaty peace terms and conditions of total exhaustion that encouraged the rise of Bolshevism, Nazism, and Fascism, and ultimately the resumption of World War I in the form of World War II.

Contrary to the Unionist argument that if North America divided into many independent countries, that they would all be fighting with each other, we might consider cases where the opposite is true. Many small Scandinavian countries and many small central European countries such as Switzerland and Liechtenstein have enjoyed very long periods of peace. Many German principalities during the late Middle Ages when Germany was highly fragmented also enjoyed relatively long periods of peace. The same was true for quite a few provinces of France and Italy which enjoyed high degrees of autonomy for many centuries up until around the 19th century.

These ideas provide important background for when I discuss the anti-Federalists in my History Reinterpreted section. These are the same folks who played a key role in demanding our Bill of Rights.

The centralization vs. decentralization debate in religion

In my Rev Ted Pike archive, the good reverend provides detailed examples regarding the persistent campaign by the totalitarian Jewish ADL to suppress freedom of speech in America. In that section I also describe the very artificial nature of Christian Zionism, whose forty million adherents in America have supported highly contrived and unwise military crusades in the Middle East that threaten to drive America into total bankruptcy and hyperinflationary melt-down.
In the last two sections of the Rev Pike archive, I make the following overview comment:

The U.S. Declaration of Independence explicitly talks about "Nature's God." Many early American leaders such as Thomas Jefferson, Benjamin Franklin, Tom Paine, and George Washington regarded themselves as Deists, which to many people today would be considered more pagan or agnostic/atheist than Christian. I would classify their views as more in the "natural religion" camp than in the "dictated" or "revealed" (or "scriptural-authoritarian" or "messianic") religious arena. They felt that while a supreme entity may exist, if it did in fact exist, it only operated within the confines of natural law and did not engage in supernatural intervention. In fact to help make this point, Thomas Jefferson went through the four Gospels and deleted everything that involved supernatural events, creating what is known today as the Jefferson Bible.
In my centralization vs. decentralization discussion, I talk about "natural" (decentralized) vs. "dictated" (authoritarian) forms of politics, "natural" (laissez-faire) vs. "dictated" (or "fiat" or "centralized") forms of money and economic theory, and "natural" ("decentralized" or "folklorish" or " indigenous") vs. "dictated" (or "authoritarian" or "revealed" or "messianic") forms of religion. There is a common intellectual thread involving important decentralization vs. centralization themes that runs throughout all these areas. These areas interrelate with each other, so that political attitudes in one area often spill over regarding the way people treat issues in other areas. So much so, in fact, that it would be a major error of omission and completely intellectually dishonest not to point this out.

There is a tendency to associate "natural" religion with "paganism" and "heathenism." This association is in some ways accurate and in other ways overly simplistic at the same time.

Interestingly enough, the word "pagan" comes from the Latin paganus" which meant "pertaining to the country," and similarly "heathen" meant "from the heath" which again implies a more rustic "countrified" form of religion. Both terms imply religious practices, beliefs, and folklore that have tended to spontaneously evolve among people who live in a more primitive, decentralized, tribalized, and rural environment.

The social significance of the pagan-rural connection

There is a strong "urban" connection behind Judaism and Christianity. This urban connection influences the authoritarian nature of "revealed" religions. It is important for me to fully explain the social implications of "urban" vs. "rural" and how this can ultimately impact on the nature of religious ideologies. There is also a very important criminal-parasitic dimension involved here that I will also discuss.

Compared to city people, country folk have always tended to live a harder physical life that is closer to nature. They have tended to be more heavily focused on the creation of tangible goods and their use in honest trade. They have typically been involved in such physical occupations as farming, herding, hunting, wood-cutting, and fishing.

In contrast, people who live in cities are more likely to make their living acting as middle-men and by providing services that have intangible as opposed to tangible value. This can create lucrative opportunities for con artists who live by their wits and by trickery. In addition, in a crowded environment, it is much easier for deadbeats to find exploitable altruists. Lastly, in a crowded environment, it is much easier for parasites (criminals) to find a steady flow of dupes to be their victims.

Some examples of urban occupations that might provide cover for parasitic exploitation operations include merchants, brokers, lawyers, prostitutes, gangsters, bankers, and privileged classes of professional priests, mercenary military guards, and politicians.

Please also bear in mind that large cities and their accompanying urban sprawl tend to be much more centralized in their operations than country settlements. The process of architectural planning, providing water and sewer services, operating police, carrying out the garbage, and myriad other tasks required to successfully operate a large city often require much more centralized forms of social organization, planning, and coordination than living in a small town in the country. Just as all of the physical structures are man-made, similarly the myriad structure of rules and regulations in cities tend to reflect convoluted piles of politically motivated, man-made expediencies piled on top of each other that are often devoid of ordinary human common sense.

The city environment can be very "unnatural." On a Darwinian level, it tends to create unusual niches removed from a natural environment that encourage the genetic survival and propagation of very unnatural types of people with bad instincts and bad character. These types of people may include sexual perverts, homosexuals, gangsters, con artists, mafiosa, and other criminals.

Thomas Jefferson idolized American farmers as a mainstay of solid, traditional American values and American democracy. He disdained city slickers and such highly urbanized creatures as central bankers. However, I do think that he explicitly called attention to the genetic propagation problem.

The American population expert Dr Elmer Pendell delved into the dysgenic aspects of urban environment in his classic work Why Civilizations Self Destruct. He felt that urban environments can actually reverse human evolution. Instead of helping to create the kinds of intelligent and fit people who have evolved under dispersed condition in the cold natural environments of northern Europe and northern Asia, urban environments tend to breed less intelligent, less noble, and less productive elements of society.

According to Dr. Pendell, because civilizations in essence reflect the accumulation of problem-solving improvements, they tend to go into decay and eventual collapse when the ratio of nonproductive, problem-creating people begins to vastly exceed the proportion of productive, problem-solving people. Non-productive people include smart criminals in addition to lazy or stupid people. (I explain Pendell's views in greater detail in my environmental vs. genetic discussion).

At this point in my discussion, let us take a look at some sleazy urban specimens.

For Exhibit A, let us consider former New York City mayor Rudy Giuliani. Please note where he acts like a transvestite homosexual when he playfully bitch-slaps Donald Trump on YouTube. The fact that he was very close to the unfolding events of 9-11, yet continues to help the Bush administration cover up its false official story, gives this false gender act a diabolical tinge.

For Exhibit B, please consider World Trade Center landlord Larry Silverstein when he talks about "pulling" WTC 7.

Talk about chutzpah! Larry Silverstein failed to discuss how he got billions of dollars in insurance coverage within months prior to 9-11 in order to subsequently cover all his losses. Nor did he discuss the mysterious work crews seen inside his Twin Tower buildings shortly before the disaster. Nor did he discuss why Building 7, with no visible structural damage, would need to be "pulled" on the same day of the 9-11 disaster. Nor did he explain how Building 7 could be pulled without weeks of prior preparation by professional demolition crews --which surely he would know about in advance as the landlord. Please go to the 9-11 section of Whatreallyhappened.com or my audio archive and site map sections for more details about Larry Silverstein and various other Israel-related anomalies. Please also see the Col Donn de Grand Pre archive.

The 9-11 operation was probably run by the Mossad with the aid of a compartmentalized segment of the CIA, very similar to what Michael Collins Piper documents in Final Judgment regarding the JFK assassination. These gangsters are not exactly like your average farmer Jones who lives along your typical rural route in the corn belt.

The country vs. urban dichotomy is very useful as more specific variation on the broader decentralization vs. centralization theme. The reason is that over time, religious theologies tend to reflect the social structure of their underlying society. Many pagan religions have tended to become more authoritarian as their underlying populations have become more urbanized or imperialistic.

For example, as certain pre-Christian societies in Mesopotamia, India, and the Americas became increasingly stratified and authoritarian, their "pagan" religions also became much more authoritarian in nature. Late-stage Mayan and Aztec civilizations that engaged in massive cannabalistic sacrifices are extreme pre-Christian examples in the Americas.

One example of authoritarianism creeping into paganism in pre-Christian Europe involved the transition of ancient Roman from a limited republic to an empire. When Julius Caesar conquered Celtic tribes in France, he would often try to kill off their Druidic priests to root out any forms of localized religious nationalism that might challenge imperial Roman rule.

Throughout the ages many conquerors have sought to destroy the natural religion of a subjugated people and replace it with their own religion for psychological warfare purposes. Although Caesar lived in pre-Christian times and hence is viewed as a worshipper of pagan gods, his pagan brand of religion was clearly more authoritarian, stratified, and imperialistic than that of many of the peoples his armies subjugated.

It is also important to note how many "revealed" religions have absorbed significant pagan elements. For example, in her book The Christ Conspiracy: The Greatest Story Ever Sold the author, Acharya S., compiles quite a lot of free thinker literature and insights on the pagan origins of a large portion of Christian practices and theology. (See also my Rev Ted Pike archive for more discussion by myself of this issue). The American Atheist at atheists.org hosts quite a few materials that identify "pagan" elements in Christianity. See also, for example, The Pagan Origins of Christmas by Paul Angel in the Nov/Dec 2006 Barnes Review. I might add that in addition t Christmas, there are also strong pagan elements behind Easter and All Saints Day (Halloween) as well.

At the other end of the spectrum from the natural religions are the "revealed" or "messianic" religions. The three prime examples are the three "semitic" religions Judaism, Christianity, and Islam.

In regard to Judaism, the late Israeli writer Israel Shahak remarked in the chapter "Political Consequences" of Jewish History, Jewish Religion: The Weight of Three Thousand Years, that “It should be recalled that Judaism, especially in its classical form, is totalitarian in nature.” (Please see my detailed discussion of the adverse side of Judaism in my mutualism vs. parasitism section).

Not surprisingly, as a largely Jewish-created religion, Christianity has also generally been very centralized and dogmatic throughout its history. Throughout the Middle Ages in many countries such as France and Italy the Christian Church controlled over a third of all land. Through its father-confessor system it was often able to produce better intelligence than the Gestapo or KGB to help keep authoritarian rulers in power. The role of the Catholic Church in conducting or suppressing public education in many Latin countries was so horrible for so long that this point alone was a major complaint of many secular revolutionaries throughout the 19th and 20th centuries.

A major reason for the Protestant Reformation was not only a protest by Northern European countries against the corruption that came from excessive centralization and political power wielded by the Vatican, but also to exercise more local autonomy on all levels, to include individualized theological interpretation as well as local political and economic control.

There are some interesting analogies here involving the political and economic arena. For example, America today essentially has a one party system consisting of "Republicrats" (or "Demopublicans") who are fundamentally united for defending the interests of Big Government and pork for politicians and "green" for special interests. As soon as a third party movement gains traction on an issue, it is typically for professional politicians who happen to call themselves Republicans or Democrats to suddenly "discover" the third party issue as if they have advocated it all along, coopt it, and steal the thunder of the third party to put them out of business.

Similarly, in the corporate world, it is always amazing to me how big natural resource companies are incapable of finding reserves compared to small entrepreneurs. Similarly, large technology companies seem to have major problems coming up with fresh new technologies compared to independent inventors and small companies. Once the little guys come up with something good, the big guys typically swoop in with cash and try to buy them out or else steal their ideas.

Similarly, Christianity has typically functioned like a "McDonalds," "Coca Cola," or "IBM" of religion, coopting pagan ideas and practices where it might suit its agenda, and then "franchising" out its operation around the globe.

Centralized religious systems tend to be more standardized. If one walks into a Catholic Church or a major Protestant denomination, one might not necessarily agree with every jot and tither of their theology, but one at least has a pretty good idea regarding what one will get in the way of religious services. This is analogous to walking into a franchise operation like a Kentucky Fried Chicken or Taco Bell. When you have seen one, you have seen them all.

On the other hand, many pagan groups are analogous to a Mom and Pop restaurants or small businesses in general. Since most pagan groups in America are relatively small and new, a person usually has to spend a lot more time doing his own research to get a handle on what what he is getting into. One positive aspect of this situation is that it can help motivate an individual to learn more about the folkways and indigenous culture and religion of his or her own people as well as gain a greater understanding of comparative religious studies.

Some pagan groups have smart, honest, and decent people. They act out of genuine conscience and sincerely wish to do good things. They may have the potential to provide a custom fit with ones personal religious needs that can be superior to most prevailing organized religions.

On the other hand, the term "pagan" is so broad that it can encompass people with political views and ethical and social orientations that are virtually anywhere at any point on any spectrum. It is quite possible that a "pagan" group might also involve socially undesirable and even psychopathic people who are simply trying to use religion as camouflage to do very selfish, hedonistic, outrageous, and even destructive things. Some of these types of groups can be quite a bit worse than the average organized Christian church. Therefore caveat emptor; look before you leap.

As another consideration, sometimes the fact that pagan groups are by definition a small minority within a society dominated by Jewish supremacists and Christians, this by itself alone can create some viscious circles. When certain groups are marginalized, whether they deserve to be marginalized or not, they might tend to attract marginalized types of people who tend to keep the groups marginalized.

However, since pagan groups in America are generally highly fragmented and decentralized, it is unlikely that even bad groups can ever do very much damage. Whenever certain pagan groups go off the deep end and do destructive things, it tends to be very localized and containable.

In contrast, forty million American Christian Zionists combined with the influence of ultra wealthy organized Jewish groups (see The New Jerusalem by Michael Collins Piper) have created a very powerful political force that threatens to destroy America as we know it today.

Towards the end of the Rev Ted Pike archive, I discuss the specific example of a pagan movement that involves the revitalization of the indigenous old Norse religion called Asatru. I see an analogy here involving computer software that is worth mention.

I would compare Christianity to the Microsoft Windows operating system. It is very much a pre-packaged and user-friendly system. It is very "top down" in its origination. It is also filled with lots encoded software packets and security holes and "back doors" that create ample opportunities for computer viruses.

In contrast, Asatru is more of an "open source" religion analogous to the Linux operating system. As a tribal religion based on tribal folklore that has typically evolved in harmony with nature and natural law, it is possible to be very secular and rationalistic in ones outlook and be religious at the same time. One can construct ones Asatru views on religious software "kernals" that conceptually fit a scientific worldview. (See, for example, The Religious Attitudes of the Indo-Europeans by Dr. Hans Gunther or Beyondism: Religion From Science by Dr. Raymond Cattell). Just as Linux has a very robust, hard kernal software base that is highly resistant to computer viruses, similarly a natural religion that is fully compatible with a natural and scientific world view can be very resistant to disinformation ideological attacks.

Incidentally, as an aside, Confucianism is an interesting example of another natural religion that evolved as a ethical philosophy that does not require a belief in supernatural intervention. It can also be highly compatible with a scientific, naturalistic worldview.

Shintoism is another example of a natural religion that many Japanese treat nonliterally as "truth in poetry," and also many interesting similarities to Asatru as a folk religion.

The natural religion approach tends to require a lot more independent analytical thought by people to study it and get the hang of. This is comparable to trying to learn a programming language on the source code level compared to dealing with a highly compiled, highly packaged Microsoft software product or a What You See Is What You Get (WYSIWYG) software interface.

Natural religion tends to evolve from intuitive connections that people tend to naturally make with their physical environment. For example, since lunar cycles tend to roughly correspond with menstrual cycles, in many cultures the moon is usually associated with some kind of feminine spiritual entity. In northern hemispheres, winter is a time of darkness and cold, therefore winter is typically associated with death. Summer, which is sunny and warm, is associated with life. A period between the summer solstice and winter solstice, such as Halloween (or Samhain in Celtic culture) hence takes on an intuitive association as a time that is halfway between life and death and hence a good time to try to communicate with the dead or reflect upon ones ancestors. Conversely the Easter period, which is halfway between the winter solstice and summer solstice, is intuitively associated with death being turned into life, or the creation of new life, and hence tends to have intuitive religious associations with fertility (creating life) or death transforming into life (resurrection or rebirth).

Getting back to my Linux analogy, by studying the evolution of natural religion, one begins to understand how original ideological "source code" has evolved into into contemporary religious theologies. Books such as Cannibals and Kings: Origins of Cultures by University of Florida Anthropologist Marvin Harris also help us understand how practical social-political considerations might become embedded as enduring religious practices over time. In addition to this type of analysis, one can also look at how religious theologies have been coopted, reinterpreted, and reengineered over time by various intellectual or power elites to perform various social revolutionary, economically exploitive, or militaristic-imperialistic purposes.

As an example of the adaptation of religion for social revolutionary purposes, in his famous work The Anti-Christ, the philosopher Friedrich Nietzsche charged that Christianity was deliberately promulgated as a psychological warfare weapon by Jews to invert or "transvaluate" the healthy instinctive values of Romans as revenge for the Roman destruction of the Jewish Temple. These Jews also wanted to turn the Roman Empire on its head for nihilistic social revolutionary purposes. With its emphasis on "other worldliness" and its scoffing at pragmatic Greek philosophy (or "sofia"), Christianity was a left wing attack on the pragmatic, right wing virtues that had helped Greeks create science, democracy, and republicanism five centuries before the alleged time of Christ. These values had also helped foster the rise of Greek and Roman economic and military power.

In his classic work The Decline and Fall of the Roman Empire, Sir Edward Gibbon expressed a similar viewpoint to that of Nietzsche. Gibbon felt that Christianity did more to accelerate the decay of Rome than preserve the best of Roman civilization. In other words, Christianity was a piece of malevolent radical left wing, mystical religious software promulgated by some ancient Jewish punk intellectuals. They often used naive gentile disciples who might get thrown to the lions to act as their "script kiddies" to spread their ideological "computer virus" throughout the Roman Empire.

Interestingly enough, even a Jewish writer named Marcus Eli Ravage echoed Nietzsche and Gibbon in the article "The Jew: Commissary to the Gentiles; The First To See the Possibilities of War by Propaganda" that he published in the Feb 1928 issue of The Century Magazine in America. It is well worth reading.

In a similar subversive spirit, this is not a whole lot different from the way Jews in the 19th and 20th century would later fund and lead Marxist movements in Europe to try to subvert gentile societies with Bolshevism. Nor is really much different from the false flag operations run by the Mossad that Michael Collins Piper documents in Final Judgment. As they say, the more things change, the more they stay the same.

Lest my criticisms of Judaism and Christianity may seem too harsh, I also recognize that there exist very degenerate and perverted forms of natural religion and pagan movements just like there also exist very degenerate and perverted branches of Christianity and Judaism. One reason is that over time psychopathic people are often able to infiltrate and corrupt for their own selfish purposes virtually every type of religious and political system known to man.

John De Nugent wrote a great article about the important historical role of psychopaths in the Jan/Feb 2007 issue of The Barnes Review. In his review of the Mel Gibson movie Apocalypto, he characterizes the pagan Aztec religion as one of the most bloodthirsty, sadistic, and psychopathic religions ever developed by homo sapiens.

As some examples of Christian degeneracy regarding the Catholic Church I can reference medieval witch burnings and the Vatican practice of selling of indulgences. Note also the recent pedophilia scandals involving certain Catholic priests.

Regarding Protestantism, we might consider the late Rev Jim Jones' brand of Kool Aid, or the Christian Zionism espoused by people like the late Jerry Falwell which is driving Americans like lemmings towards national self-destruction.

As some examples of questionable practices by adherents of the organized Jewish religion, we have the suppression of free speech by the ADL (please see the Rev Ted Pike archive), the JFK assassination, promotion of out of control Third World immigration into America, the assault on the U.S.S. Liberty, the likely culpability of Israel in orchestrating 9-11, the shanghai of American foreign policy into a Middle East quagmire under the High Priests of War, the torture of Palestinians, the Jonathan Pollard treason, the conversion of American into a bankrupt globalized casino economy, Jewish domination of organized crime and pornography in America, the massive Jewish support for Bolshevism in the early 20th century...it is very long list (please see Col Donn de Grand Pre's The Viper's Venom for more details).

The strong "urban connection" behind Judaism and Christianity

It is important to note how both Judaism and Christianity have very strong urban origins. The Old Testament tales that portray Jews as a pastoral people in Palestine are highly suspect as real history, as John Tiffany pointed in his article Ancient Israel: Myth vs. Reality (May/June 2007 issue of the Barnes Review). (Incidentally, he also raises questions about the historicity of Jesus in his article New Revelations On the Life of Jesus, Nov/Dec 2006 issue, and also the historicity of the Wailing Wall in The Myth of the Wailing Wall for the March/April 2006 issue).

When one looks at independent sources on the ancient Jews, a totally different picture emerges from the way Jews describe themselves in their own literature. The one exception to this is that if one is intelligent and knowledgeable enough to be able to read between the lines, much like Rev Ted Pike, even the Jewish literature itself provides important internal evidence regarding the real nature of sociopathic Jewish leaders.

Independent historical sources portray the Jews as a people who evolved out of the highly urbanized setting of Babylonia, not Palestine. They spread across the major urban areas of the ancient world in small colonies and were known for their ability to use covert, gangsterish practices to dominate businesses. In ancient times, just like today, they were known for their deceitfulness, proclivity towards financial speculation, and domination of organized crime.

In ancient Rome, Jews dominated the slave trade. (They also dominated the Negro slave trade from their home base in Newport Rhode, Island in colonial American, and today they are a key player in the white slave trade operated out of Israel as well as pornography industries in America). They were hardly characterized by gentile contemporaries as a specially noble and virtuous people chosen by God to be a light to the world. In fact, quite the opposite. I discuss some of these sources in my Rev Ted Pike archive page and also in my mutualism vs. parasitism discussion. Among other things, I note that the First century Roman philosopher Seneca commented in De Superstitione: "The customs of that most criminal nation have gained such strength that they have now been received in all lands. The conquered have given laws to the conquerors."

Also, contrary to the vast number of Bible movies on American TV that portray early Christians as well-meaning humble gentiles only one step away from being fed to the lions, many independent historical sources portray early Christianity as a phenomenon sponsored by wealthy urban Jews who had gained financial supremacy in many parts of the Roman Empire. It's core adherents were often highly urbanized, wily Jews who needed a universalistic religion that helped them to interface with the gentile public and defuse their concerns about Jewish exclusivity while at the same time exalting Jewish tribal history and "chosenness." All the unfavorable material in the New Testament about the Sanhedrin framing and crucifying Jesus is both a "limited hang out" and a "red herring" compared to the greater gain for the Jews that came from promoting a universalistic religion that simultaneously detribalizes and destroys gentile natural religions (and their resistance to alien invasion) and exalts Jews as special "holy" people entitled to take positions of influence within gentile nations.

In all of this discussion, I do not mean to imply that all Christians are bad people or that Christianity as it is practiced by middle America today is necessarily a bad religion. I believe that quite a few Christians are well-intentioned people with good instincts. I think that a lot of Christian churches do good things for their communities. I also think that there are a lot of good things embedded inside Christianity along with quite a few things that I find very negative.

I also do not believe that all Jews are genetically evil psychopaths, or that their desire to retain a tribal religion is necessarily a bad thing. To the contrary, so long as Jews do not act like gangs of predatory criminal piranha, I think that preserving a tribal religion and folk traditions can be very healthy. In fact, I wish more of my own fellow whites would show an interest in preserving their own indigenous Indo-European religiosity, European cultural folk roots, and racial integrity. My big problem regarding Jews in general is that Reform Jews, dissident Jews, and anti-Zionist Orthodox Jews seem to be continually unsuccessful in preventing Zionist criminal crazies from rising to the top and getting completely out of control.

What I do wish to promote is the ability of individuals to become more savvy "consumers" of religious "product." I think that most organized religions, to include Judaism, Christianity, and Islam, can be analogous to eating overly refined junk food sold by major corporations who are out to skim profits at the expense of public health. Most food sold by big meat corporations have too many toxic hormones and chemicals embedded in them. Most big fast food chains sell food with way too much saturated fat and sugar. Just as I believe that one should be very selective and increase ones servings of unpackaged, unprocessed, raw foods to stay healthy, it also helps for one to supplement his diet of organized religion with some knowledge about natural religion, scientific skepticism, and traditional white folk culture.

Getting back to my discussion of the short term vs. long term tradeoffs of a natural vs. fiat money system, one can make a similar analogy regarding natural vs. a revealed religion.

For starters, sociobiologists might argue that people have evolved to have subjective religious instincts because this helps them pass on their genes compared to those who lack this trait. Religion is ultimately a genetically-based form of group altruistic behavior that supports long term group survival.

While one may feel a very strong subjective religious instinct, one might also recognize on an intellectual level that no one has ever been able to scientifically prove the existence of God. This fact alone suggests that as revealed religions become increasingly authoritarian and dogmatic, they run an increasing risk of becoming completely decoupled from reality. They also increasingly undermine the ability of their adherents to make rational decisions.

Therefore, while a decentralized natural religion may have less dogma and theology, and hence be a bit harder to practice in the short run, in the long run it does much less damage to the ability of people to act rationally in order to successfully adapt and improvise. This is analogous to the way a hard money system also requires more self-discipline, responsibility, and foresight on a grass roots level to successfully implement, but is vastly more stable and honest in the long run than a fiat money system.

Conversely, revealed religions, with their greater dogma, theology, and authoritarian structures, offer more comfort and the appearance of greater certainty in the short run. This is analogous to the way central bankers can goose the economy in the short run by inflating their fiat money currency in order to create a false illusion of prosperity. However, just as central bankers tend to addict their economies to increasing levels of fiat money "stimulus," and ultimately create major economic distortions that help lead their countries towards major hyperinflationary economic melt-downs, similarly authoritarian "revealed" religions tend to saturate people with so much mysticism and dogma over time that they are more likely to make disastrous social policy decisions over the long run.

In America today we are suffering a double whammy from both central bankers and fanatical authoritarian religionists. The Federal Reserve is leading us towards a hyperinflationary blowout. (Please see my charts from the Grandfather Economic Report in my Critical Issues section). The Christian Zionist establishment has already led America into disastrous dirty nuclear war (via the use of over 2,000 tons of depleted uranium) in the Middle East. Worse yet, these religionists and their Zionist neo-con allies are not finished. They are now trying to push America towards a disastrous war with Iran.

On top of all of this, the Christian Zionist establishment has also generally supported domestic policies involving open borders, racial integration, and a globalist economic agenda. This has been spearheaded by ADL and other Jewish groups. This has led to the demographic disaster we face internally, where white Americans are rapidly being replaced by nonwhites. The white percentage of the total U.S. population has slipped from 90% in the 1960's to somewhere below 70% today. We lose about 1 to 1.5% a year, and will be probably be reduced to minority status nationwide within a couple of decades given the current "human Katrina" of illegal immigrants that continue to swamp this land. In addition, the white middle class is rapidly shrinking as whites continue to lose more of their jobs overseas to aliens. An important factor involved here is the fact that most white American corporate chieftains feel no loyalty whatsoever towards supporting white genetic survival or maintaining the domestic industrial capacity required for genuine national security and sustainable internal economic advancement.

The will to support the physical survival of ones own people is ultimately a cultural, racial, and religious issue, and not just an economic one. This is an area where many leftist Christian Churches have done more to spread egalitarian ideological poison on white Americans rather than provide pro-survival spiritual guidance.

Many American Christian Churches show similarities to the Afrikaner Church of South Africa. This misguided Christian establishment allowed itself to be conned into supporting Black Marxists who ultimately took control of their country. This formerly white-led and prosperous country has now become such as mess in the last decade that over a million whites have already fled. Young white people in South Africa today see no future in their country. If nothing is done to reverse current trends in America, a similar fate awaits us here as well.

Obviously there are people in high religious places in America who have done more do brainwash white Americans than help them make rational policy decisions rooted in reality. As all of the aforementioned tragic trends play themselves out, we are no doubt in for some very painful lessons in the drawbacks of excessive religious centralization.

Summary regarding top down vs. bottom up

I think that the libertarian line of analysis is a vital approach for addressing "top down" vs. "bottom up" issues. Libertarians tend to focus upon factional conflict, special privilege, and the erosion of rights. All of these things are important to know about, although they do not necessarily paint a complete picture.

It almost goes without saying that ideologically literate Americans need to understand libertarianism in some detail. After all, the American Revolution was essentially a libertarian revolution. Libertarianism has always been an important reference point in American politics.

Paradoxically, selling libertarianism in America tends to be both too easy and too hard at the same time. It is too easy because just about everyone will pay lip service to it. After all, how many people enjoy being lied to and overtaxed by their busy body government or bossed around by some tyrannical alpha male at work?

The really hard part comes when we try to achieve measurable results in terms of downsizing government, getting rid of the central bank, and fighting corrupt special interest groups such as AIPAC, the ADL, and their spy rings. All of a sudden too many libertarians turn into weekend warriors and melt away without achieving decisive results. Americans keep sending one Mr. Smith after another to Washington. Not long after they take their seats in Congress, in most cases we keep getting business as usual.

The "fake libertarian" Trojan Horse problem

Worse than what I have described thus far, every so often one sees rising leaders who are experts in libertarian philosophy, who subsequently turn into its most dangerous enemy.

As one example, back in 1966 former Fed Chairman Dr. Alan Greenspan wrote Gold and Economic Freedom in which he observed:

...Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Back in 1966 Greenspan belonged to the inner circle of the anarcho-libertarian guru Ayn Rand. Despite his Jewish background, one might think that with his strong libertarian philosophical background, he would be the last Fed Chairman to help fulfill the controversial Benjamin Franklin prophecy. (Various Jewish organizations claim this is a fraud; however, according to various rightist sources it came from "In Chit Chat Around the Table During Intermissions," a section of the Diary of Charles Cotesworth Pinckney of South Carolina. The sole copy of this diary mysteriously disappeared from the Franklin Museum in Philadelphia.)

Greenspan's tenure was such a disaster for libertarian economics that one might wonder if old Ben Franklin was on to something after all. As Fed Chairman, Alan Greenspan morphed into the greatest enemy of gold and a stable U.S. dollar in American history. He gave rapid continuing expansion of the neo-Jacobin Welfare Warfare super state all the financial rocket fuel it needed, and then some. Under his watch, unregulated derivatives saw exponential explosion, and the anti-free market manipulations detailed by John Embry achieved a whole new quantum level of interventionist deviancy. The alleged shenanigans of J.P. Morgan Chase and Barrick against gold that were the subject of the Blanchard suit are breathtaking examples of anti-free market manipulation and corruption.

Abraham Lincoln was another monstrous disappointment in American history. I have already discussed Dr. Thomas DiLorenzo's and Sam Dickson's dark interpretations of his career.

It is clear from the record of Lincoln's debates that on an intellectual level he understood American libertarian philosophy better than most anyone else in his era, yet he did more in relative terms to move America towards a more brutal, centralized, big government than any other President, even compared to other big government interventionist Presidents such as Woodrow Wilson, FDR, LBJ, and now George W. Bush. I invite the reader to visit the King Lincoln archive at lewrockwell.com for more disturbing details about the real Lincoln.

Therefore, I believe strongly that while studying and understanding libertarian ideas is a very important first step, this alone is not a sufficient condition to adequately motivate people to effectively restore liberty in America. Necessary, yes, sufficient, no.

I believe that in order to effectively preserve our liberties and rights of basic survival and self-determination in this world, one must also integrate libertarianism with the genetic side of the environmental vs. genetic debate that I will describe next.

There are important character and ethno-racial issues that have to be resolved in addition to purely philosophical questions. As an example, in my section on mutualism vs. parasitism, I discuss some social science research into the "fractured" character of the "criminal personality." Based upon my own study of the public and private behavior of both Lincoln and Greenspan, I see ample evidence of fracturing and divided loyalties in both cases.

While I love libertarian philosophy on an emotional level, I realize that taken only by itself, it can actually work as a "poison weed." Among other things, it can encourage moral hazard and serve as an intellectual cop out. For example, acting on the assumption that everyone is a fully rational, self-sufficient, adult, it can encourage people to play hardball and even break their implied agreements at will in their business and social relations with people who are very vulnerable, often for reasons beyond their control. With their strong environmental viewpoint, many contemporary anarcho libertarians are willfully blind towards racial and other biological differences. With their heavily contractual and utilitarian viewpoint, they are also willfully blind towards the need for people to have a sense of shared culture and values and caring community leadership, particularly while white Americans genocide themselves with low birth rates and get pushed out of neighborhoods by illegal alien immigrants.

Many corporate executives who outsource jobs and manufacturing infrastructure overseas at the drop of a hat when it boosts short term profits, as well as greedy employers of illegal immigrant labor inside our borders who need cheap labor, love contemporary anarcho-libertarian philosophy. It tells them that pursuing social and economic policies that reduce whites to a minority in America does not matter.

In actuality, these things matter greatly. Turning America into a multi-racial, multi-cultural Third World slum is literally bankrupting this country, escalating graft and corruption, destroying social efficiency, increasing social tensions, and moving us ever closer towards Thomas Chittum's vision of Civil War II where millions of Americans may eventually die.

In other words, to some people libertarianism is license to be extremely short-sighted and selfish, with the attitude that they can dump a lot of hype and risk on other people, and if other people "bite," it is their own damn fault, because we live in caveat emptor world and it is their own fault if they are such "suckers" are not tough cowboys.

A big problem with this viewpoint is that the advancement of civilization depends on steadily increasing specialization and the division of labor. No one has the time to look under hood and do complete due diligence in every transaction if they are going to depend on the untold thousands of devices and services that make up a complex economy in the space age. The advancement of sophisticated, leading technology businesses also requires a certain level of moral restraint, where people have to show teamwork and restrain themselves from everyone reaching in the cookie jar all at once as they turn intangible business opportunities into tangible prototypes and ultimately cash flow.

Yes, early Americans believed in personal freedom, but many of these descendants of Puritans also believed in assuming personal responsibility, exercising personal moral restraint, and displaying the courage to fight for not only ones rights as well as the rights of others (patriotism).

What American businessmen really need on an ideological level in order to achieve long term, sustainable prosperity for both themselves and America is not anarcho-libertarianism, but libertarian racial nationalism. The latter approach, also known as 19th classical liberalism, offers the best long term combination of relatively low taxes, economic freedom, and social stability that they require.

Yes, I genuinely believe in the cause of liberty. However, to be effective, I believe that one must not only make common cause with people of good character, but must also combine a love of liberty with strongly felt racial, ethnic, religious, and community bonds. This is necessary to fend off the encroachments of alien threats that may range from illegal alien immigrants on a pedestrian level to Zionist criminal gangsterism on an elitist level. It is also necessary to achieve the critical mass of staying power, resolve, teamwork, and self-sacrifice required to carry through to sustainable success.

Part Three: ....Environmental vs. Genetic

Part Four : ....Mutualism vs. Parasitism

Back to: Part One Overview

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