Posted by: graemebird | June 11, 2007

Infrastructural Goods/100% Backing/Clarity In Property Rights/ A De Soto Interpretation.

From Catallaxy:

We can have anarcho-capitalism in money, but only after we have anarcho-capitalism in law-enforcement more generally.

So until we have sorted out things with private police and courts, enforcing natural law, we ought to prosecute the fraudulent debasement of money.

When someone starts passing off dud money as the real thing via fractional reserve or via bogus coinage the fraud occurs when he does this and not when the consequences of boom and then bust or bankruptchy, manifest themselves.

To say that its a contract between the customer and the bank is not true at all because the customer will become a confederate to this fraud as soon as he transfers the dud money and passes it off as being real money.

The fact of the matter is that capitalism, in its more sophisticated high-tech form, only can arise out of a legal framework that gives great clarity to property rights.
This contention has been proved absolutely by the recent work of Hernando De Soto…. cruelly robbed so far of the Nobel prize.

This is an historical and practical fact.

So we here in Australia have great clarity in property rights with regards to land titles and property titles and having this great clarity in property titles is the threshold from when a third-world country can go from being CRONY-CAPITALIST to being a modern country.

Now it would not be right to eliminate government establishment or enforcement of this clarity-in-property rights until we have a system of private-police, private-courts, and private enforcement of natural law.

It would mean throwing industrial civilisation away to do this and inviting gunfights between neighbours over the position of their bordering-fence.

We do not have clarity in property rights when it comes to infrastructural goods and that is why this INCREASINGLY important part of our economy is either dealt with via socialism or crony capitalism.


Their ought to be no naieve libertarian (or socialist-using-libertarianism against itself) objection to the listing and recording and clarifying of regulations as they relate to infrastructural property titles and the rules relating to how and when these property-titles can be created.

Infrastructural property titles are to do with TRANS-SPATIAL goods.
Like power-lines and underground pipes.

To trans-spatial undertakings like you tunnelling under the highway or yet even under someone elses house.

The failure to understand all this is why we have fucked up our privatisation of Australias Telecom (now Telstra) and why it costs tax money to make roads rather then the road-makers and owners defraying our government overhead down to next-to-nothing.

We ought to have a legal and regulatory framework for infrastructural goods. And we ought to not take the naieve-libertarian position that we can get rid of each and every such regulation.

We can and therefore SHOULD always REDUCE AND IMPROVE the regulations.

But we would get rid of them in error if we tried to do this before we got to a position where we had private police….. private courts…. and the private enforcement of natural law.

Money is the ultimate infrastructural good.

It is not too much to ask that a 49c coin not be passed off as a 50c coin.

Its not too much to ask that the coins be standardised so that 100% gold 10 gram coins are not being confused with 9 gram gold coins or 10 gram coins with 9 grams of gold and 1 gram of lead hidden inside.

To say otherwise is to take a naieve idiots view of libertarianism and to committ the intellectual crime of putting the anarcho-capitalist hat on for a fraction of a second and then taking it off again.

For the time being regulation in money means clarity in property rights.

Which means the various private mints are not to make coins that can readily be confused as to their content and denomination.

And it also means that unbacked titles to precious metals or partially-backed titles to precious metals cannot be issued in such a way as to having them homogenised with the fully backed gear.

To deny this is to deny standard laws of economics. One of them of many hundreds of years standing.

That is to say Greshams law.

People of course are free to print as much monopoly money as they want. And they can waste time all day trading this monopoly-money.

This won’t happen of course. I’m not going to waste time printing GMBy’s and try and pass them off in the market for “money” with fatfingers’ signature and photo gloriously appearing on the note……. overlayed with intricate mosaics of aboriginal paintings.

The issue of clarity in property rights comes up when a 90% backed warehouse title is passed off as a 100% backed title or if they are traded at par value with eachother.

Just as it does when a Spanish Gold coin is chopped into pieces-of-eight and you keep the largest peice and pass off all the others.

The above pieces-of-eight methodology could not support modern industrial society which needs far greater clarity in property rights.

You can make any deal you want with the banks but once you transfer this make-believe….. or only partially-backed money…. to another bank you are or should be considered party to a crime.

And in practise that crime might be as large as radical leftists trying to undermine the system in its entirety.

Now I’ve proved my case many times over.

If you want to undermine it try undermining on the basis of fully-derived monetary economics.

This is no fringe issue. We cannot reduce governmental depredation apreciably by very much in practice unless we get this sort of thing right.

The need for infrastructure will grow every year… promoting as it does more crony capitalism and more socialism.

And the brute-force-funny-money just undermines the system in so many subtle ways.

So lets see your fully-derived monetary-economics refutations to this De Soto view of the situation.

Hernando De Soto in terms of the idea of clarity in property-rights.

And Jesus Huerta De Soto’s in terms of the history of banking.
The very real problem is that you socialist-educated meat-heads are incapable of knowing when a fella has proved his case.


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