The battle lines are forming in Washington DC. Barring any tricks which the embattled (racist, redneck, kooky, backward, radical, unelectable) libertarian wing of the Republican Party may still have up its sleeve, it seems to be another contest between Marxist-Leninist Socialists who will take everything we have in the name of social welfare, and National Socialists who will take everything we have in the name of national security. Much like in Alien vs. Predator, whoever wins, we lose.

I think we’ve crossed the Rubicon toward tyranny and fiscal ruin long ago, and the important thing now is to brace for calamity. A fiscally conservative friend of mine is appalled by my cynicism. He invokes America’s greatness and my veteran status in an attempt to bring me back to the noble cause of shutting up and blindly supporting the Republican Party. He recently encouraged me to watch Allen West’s speech at CPAC 2012. He wants, presumably, for me to give people like Allen West my time, money, attention and respect, because nothing is more important that defeating Obama (. . . says the Predator about the Alien).

In the speech, Allen West goes on at length about the virtues of the Constitution. He said, “[The founders] laid out in no uncertain terms the types of things government would have the right to do, and the types of things it wouldn’t.” I’d love to hear him reconcile this with his discussion of “a Chamberlin-Churchill moment,” and “kinetic solutions” to Iran’s nuclear research, and “the precipice of World War Three.” Does he know the Constitution requires presidents to seek congressional declarations of war? Or does he, like most politicians, only believes in the Constitution when it foils his political opponents.

He said, “The founders knew that if government were allowed to restrict the freedom of the people . . . freedom would not long survive,” yet he voted in favor of renewing Patriot Act provisions.

He decries reckless spending: “We’ve allowed the federal bureaucracy to balloon out of control,” yet he voted in raise the debt ceiling. When questioned by Young America’s Foundation’s Ron Meyer, he asked for the thing all politicians have always requested: unity and support. Presumably, Allen West’s rapid betrayal of the principles he invoked in his campaign would be remedied if only I gave him more money, time, attention and respect. . . .

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I think my Ukrainian heritage fuels my twin obsessions with Soviet history and economics. Sadly, this often puts me on opposing ideological ground from my good friends and fellow alumni of the Iowa Writers’ Workshop, which recently helped bring “Utopia in Four Movements,” to Iowa City’s local, tax-supported theater.

Sam Green, the filmmaker who narrated the exploration of “the battered state of the utopian impulse,” on one hand described socialism has having gone “monstrously wrong,” and on the other, expressed open sentimentality for the Russian and Maoist revolutions. He showed pictures of executed Cambodians and also said a copy of Mao’s Little Red Book was among his favorite possessions.

For any readers who may have left the theater with a sense of moral ambiguity, I offer this brief history lesson.

In “The Black Book of Communism,” French researchers estimate communist China slaughtered 65 million of its own citizens. Estimates of Soviet citizens killed by their leaders range from 20 million to 62 million made by political science professor R. J. Rummel. In Cambodia, after an unholy combination of Marx and Rousseau, they attempted an agrarian based communist society and managed, in an astonishingly short period of time, to slaughter almost a third of their population. Perhaps Stalin was right. Killing one person is a tragedy. Killing millions is only a statistic.

The sound of societies turning into gigantic meat grinders was accompanied by three choruses from leftist intellectuals. One sang “It’s not so bad.” Perhaps its leading performer was New York Times reporter Walter Duranty who won a Pulitzer Prize for dismissing the starvation of six to ten million Ukrainians as “malignant propaganda.”

The second chorus sang “next time”: Forget Lenin’s hostages and mass executions, forget the extermination of the Don Cossacks. The right people weren’t in charge. Forget the Gulag Archipelago. Forget China’s Great Leap Forward and North Korea’s Arduous March. Forget the cannibalism. Revoke private property and this next time, we will deliver paradise.

The last chorus sang “that’s not real communism.” For them, I present some of Marx’s and Engels’s less publicized writing: In the January 1849 edition of Marx’s journal “Neue Rheinische Zeitung,” Engels wrote, “Basques, Scottish Highlanders, Serbs are racial trash and will have to be destroyed.” Marx wrote in his “People’s Paper,” April 16, 1852, “The classes and races too weak to master the new conditions of life must give way. They must perish in the Revolutionary Holocaust.”

Mr. Green showed a picture of Bolshevik soldiers marching during the Russian Revolution and wondered how exciting it would have felt to be among them. By what standards does he go sentimental? If it’s brute force combined with a glorious vision of the future, he could easily include Germany’s National Socialists (i.e. Nazis) on his list of supposedly noble and only slightly misguided movements. They had a great vision too, for the living.

Contrary to what I learned in school, the National Socialists of Germany were not ideologically opposite from the Marxist-Leninist Socialists of the Soviet Union. Their great difference lay in the fact that one slaughtered millions according to race, and the other slaughtered millions according to “class” — the ambiguous, undefined term at the center of Marxism. They were two wings of the same cult of state power, determined to carve society into a better version of itself using bullets and bayonets. It deserves no sentimentalism.

Let’s hope the “state of the utopian impulse” remains battered.

В українській мові: here.

It is difficult to contemplate the enormous extent to which the world changed when the Soviet Union collapsed. The more economists and historians study the Soviet Union, the more apparent it becomes that it existed as a house of card built upon economic fallacies and that its collapse was inevitable.

We should remember, however, that the economic fraud of Soviet central planning is not only known historically, in retrospect. It was predicted before it happened. Based strictly on a theoretical understanding of human action, in other words, of economics, the eventual collapse of the Soviet Union was apparent to L’viv-born, Austrian School Economist, Ludwig Von Mises.

In 1921, before Lenin was even forced to restored partial property rights through his New Economic Policy (Новая экономическая политика, НЭП, Novaya Ekonomicheskaya Politika ), Mises criticized central planning in a book entitled “Socialism.” He predicted not only that the Soviet Union’s collapse, but that it would eventually have many factories and empty stores. His reasoning was simple: without market prices, society is blind to its true desires.

We are now facing a second collapse which may alter the world as much as the collapse of the Soviet Union did — the collapse of the dollar. Using a similar theoretical understanding of human action, economists of the Austrian School unanimously predict the dollar’s collapse. The reason is also simple and should be self-evident: the United States government cannot stop printing money.

The intellectual work of the Austrian School is largely devoted to unmasking the many euphemisms the government and its apologists use to conceal this fact: economic stimulus, quantitative easing, liquidity traps.

The exact date of the dollar’s collapse is not only unknown, but unknowable. As Mises noted, an objective way of determining the date of a significant economic event cannot exist because the knowledge itself would change the date of the event.

For example, if we could determine that the dollar was going to lose half its purchasing power on Friday, this would cause people to spend dollars as quickly as possible on Thursday, changing the date of the collapse. Theoretically, however, it is clear that the United States government will be forced to chose between destroying the dollar and defaulting on its debt, and default appears out of the question.

It is very likely that the hryvnia will collapse along with the dollar. The price increases plaguing Ukraine are at least partially (perhaps totally) attributable to the country’s monetary policy. By keeping a fixed exchange rate between hryvnias and dollars, Ukraine’s central bank imports inflation from the United States.

There are probably two reasons for this monetary policy. First, Ukraine’s government is dependent upon IMF loans to avoid it’s own long-overdue default. The IMF promotes dollar-friendly policies. The more inflation gets exported to other countries, the longer the collapse of the dollar can be delayed, and the further the gravy-train of printed money can carry the vast bureaucracies of government. (In the United States, one of out six people works for government.) It is likely that the IMF pressures Ukrainian monetary policy.

Secondly, large industries which export their products benefit in the short term from a devalued currency, and many of Ukraine’s most influential people are industrialists who rely on exports. They may also be pressuring the Central Bank of Ukraine to import inflation from the United States. It is important to remember, however, that they only benefit in the short term. In the long term, all of society suffers under the skyrocketing prices and the chaos they create.

The question remains, what to do about this?

For individuals, both dollars and hryvnias should be treated like the hot potato in the similarly named children’s game. Do not get caught holding a large amount of dollars or hryvnias when the music stops. People who have worked hard and lived modestly and want to preserve the value of their savings for the distant future should find ways of doing so that do not involve keeping large quantities of currency.

For society, we should distinguish between what Austrian School economist F.A. Hayek called the voluntary, private-sector economy and the coercive, public sector economy. He called the public sector economy coercive because it runs on taxes which are collected by force.

After the collapse of the dollar, the voluntary sector of the economy will go through a difficult time as it finds a new medium of exchange. Where currencies have collapsed, cigarettes, cows, flour, and bottled water have served as temporary mediums of exchange. Gold have silver almost always emerge as the voluntary choice when a society isn’t forced to use its government’s currency.

The private sector will recover naturally and peacefully because people will still want all the goods and services it produces — food, clothing, entertainment, books, technology, travel. Those businesses who fail to produce goods and service which others want at prices they are willing to pay will go bankrupt, and their land, labor and capital goods will eventually be incorporated into more productive enterprises.

By contrast, the coercive sector of the economy will recover neither naturally nor peacefully because it doesn’t produce goods and services which people voluntarily consume. They run on money which is collected by force or printed. Look for the vast bureaucracies of governments all over the world to suddenly find themselves starved for money, and look for all manner of demagoguery as they attempt to justify their existence and reimpose another system of wealth extraction upon the private sector of the economy.

The recent protests in Greece and in the U.S. state of Wisconsin were protests by government workers and their economically misguided allies against fiscal responsibility. They are a premonition of what is to come on a much larger scale.

Preserving bloated, unnecessary, inefficient government bureaucracies, will make everybody, including those protesting, poorer. Forcing these people to enter the voluntary sector of the economy and to produce goods and services which you and I will voluntarily pay for will make everyone richer. Those who contend that there is a limited number of jobs in the world over which we must all compete are wrong. The only limit to the number of jobs in the world is the number of needs and desires felt by humanity. In other words, none whatsoever.

Perhaps the most important question of our time is what comes after the dollar’s collapse. The rather obscure question of whether people will be free to choose their own medium of exchange, or if another printable, government currency is imposed on society by the brute force of law is a question between freedom and slavery. It is too late to save the dollar. I hope it is not too late to educate society about the nature of money.

You can read the original column “Business Sense: Nation should not be in rush to lift moratorium on sale of farmland” by Michael Lee here. I also saved a copy here.

My reply:

I was disappointed to read Michael Lee’s column last month in support of the national moratorium on the sale of farmland. I am always saddened and amazed to see that even analysts who readily reject central economic planning quite happily centrally plan once they seize the reins of government or a journalistic platform.

We should remember that there is no law without punishment. Every law, statute, regulation is backed, ultimately, by force or threat of force. The use of force to restrict peaceful, voluntary activity, like the sale of land by an “owner,” should always be viewed with extreme suspicion. “Owner” bears quotation marks, because one doesn’t truly own something whose usage is severely restricted by the state.

Throughout history, restrictions on peaceful, voluntary activity have been justified in various ways. Mr. Lee echoes one of the most popular — security for the incompetent. Because he believes some land owners will squander the money they receive, any land owner who sells his property must be considered a criminal.

His column bears the same pretense of knowledge assumed by history’s many glorious central planners. He knows, for example, that the current practice of landlords receiving “their annual rental income in cash or in a combination of cash, seeds and straw” is superior to the lump-sum profit from a sale of land because of its reliability, and that land value as well as rents and the landlords’ income will increase as the global population increases. I’m not sure how he’d reconcile this argument with Ukraine’s crashing population (which I’m certain has nothing to do with the countless, arbitrary restrictions over the lives of Ukrainians) and even if it were true, it assumes all land owners will prefer more income tomorrow instead of less income today. What if an 85-year-old land owner wants to see the world for the first time in her life? Is she condemned instead to wait for tomorrow’s supposedly higher income?

The column presumes these rental increases (driven by a nonexistent population growth) may be the difference between a “village thriving or dying a slow death,” and that leasing land coupled with “some initiative from the state” will “lead to a wider renaissance in rural communities.” No doubt many will feel reassured to hear the great planners not limiting their genius to economics.

He presumes that land ownership and renting is “an efficient way to filter foreign investment directly to where it can have the greatest impact,” as if anybody knows where that is. He knows too that for companies forced to rent instead of buy, “not having to find huge amounts of capital to pay for land is advantageous. . . it can be put into equipment, inputs and infrastructures where it will have a greater impact on the return on investment.”

If the case for the superiority of renting, both from the perspective of owners and agri-businesses, is so obvious, one wonders why the selling of land even needs to be criminalized. Are we to believe businesses are so stupid they need to be forced into the most beneficial course of action?

The fact is, neither Mr. Lee, nor any technocrat, nor I know which specific business practices are best. The only way to discover it is to respect property rights and allow the capitalist process to work.

Those who consider Ukrainians not ready to manage the property they supposedly own are mistaking the poison for the cure. It is precisely because the capitalist process here has been so mutilated for so long, that there is less competence, innovation, and discipline than in more capitalistic countries. In Ukraine those who posses such virtues have had less opportunity to receive rewards or accumulate capital, and those who don’t, little reason to learn them as one’s success in this economy seems determined too much by obtaining the political connections necessary to navigate arbitrary restrictions like the ones Mr. Lee supports.

Yes, letting capitalism work means allowing people to fail. I would remind those who seek to compromise property rights in the name of security for the incompetent that throughout history and without exception all levels of society, rich and poor, have been better off when property rights were upheld, and restrictions of peaceful, voluntary activities were minimal.

The Audit the Fed amendment had 320 co-sponsors and broad bi-partisan support. The fact that Loebsack and more than 100 other co-sponsors betrayed the amendment at its decisive moment reflects the power of the Federal Reserve.

The Fed is a semi-private bank that sets interest rates by an elaborate process that ultimately amounts to printing money and thereby diluting the value of the money in our wallets, bank accounts and mattresses.

(Read more from press-citizen.com)