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Stop Corporate Charity

December 29, 2010 2 comments

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There are many reasons to oppose corporate charity. It is deceptive, immoral, and border-line criminal. It hinders economic growth for the wealthy as well as the impoverished, and promotes a culture of ambiguity, pompous grandstanding, and anti-productivity.

Under a strict construction of the ethics of contractual agreements, corporate charity is an act of theft against the corporation’s stockholders and other investors. This is obviously so because a corporation is by definition a for-profit entity, and its investors lend their capital to the corporation ostensibly to receive a return on investment in proportion to the corporation’s profits. Investment carries risk, of course, and if a corporation fails to produce a profit by the honest inadequacies of its executives, that is business. On the other hand, if it fails to produce a profit – or fails to produce as much of a profit – because the executives made a decision to donate some portion of revenue to charity, however small a portion it may be, the investors have been cheated out of returns they were owed under their agreement with the corporation. This is exactly the same crime as occurs when executives defraud investors by embezzling company funds into their personal accounts. It is only treated differently because of differing public attitudes about perceived greed and perceived charity, which, right or wrong, should have no bearing on whether theft is a crime.

An argument can be made that the situation is not so clear-cut because corporate charity has gained widespread acceptance, or at least widespread acknowledgment. Since almost all corporations engage in at least some level of charity, it could be argued that investors understand at the time they decide to purchase stocks that some portion of their funds will be given away rather than used for real investment purposes. That’s not a totally invalid point, but it’s extremely shaky. If a consumer buys a sealed box labeled “a dozen eggs”, but knows at the time it probably only contains ten eggs because a short dozen scam is widespread and typical in his town, the fact that he knew he was most likely getting scammed doesn’t make the scam okay. This is what is happening with corporate charity: investors are being scammed out of a portion of their investment, but they expect they probably will be. That doesn’t justify it.

Furthermore, even if we accept the argument that an expected scam is not truly a scam, that leaves open the question of precisely what is expected. Maybe investors only expect that the corporations in which they choose to invest will donate one percent of their money, but the corporations actually donate two percent! Maybe the investors expect that each corporation will steal whatever the average amount of stealing is, but in fact some corporations by definition must steal more than the average. Clearly there is no way to reason out of the reality that deliberately non-profit actions by an explicitly for-profit institution is a criminal act of theft against investors. This alone should be sufficient to compel any honest person to oppose all corporate charity.

This is nowhere near the end of it, though. As with almost all criminal acts, the damage done by corporate charity really extends far beyond the simple breaking of an abstract principle. The principles of contracts exist for a reason, and the violation of them has severe negative consequences for everyone. When executives steal from investors to donate to charities, they decompartmentalize the economy, blurring the lines between production and consumption, and making it harder for investors as well as consumers to make informed choices. Compartmentalization and specialization are necessary in a productive society, because they allow for the greatest success for the most productive entities and the most immediate failure for the unproductive ones. Both production and charity are made more efficient when they are handled separately.

Consider an entrepreneur who innovates in automobile technology, reducing the costs of high-speed transportation sufficiently that millions of families who were previously too poor to afford it now have access. Good for him. His company will likely make a very large amount of money selling these cheaper automobiles, and it should, because that profit is the incentive that brings about innovation. It’s a reciprocal relationship – the entrepreneur is wealthier precisely because he made poor people wealthier. The more people to whom he is able to provide transportation affordably, the more money he will have. In this way he has done a great service to himself as well as to others around him.

Now suppose this entrepreneur donates huge portions of his money to charity, or worse, steals from the investors in his company and donates their money to charity. No matter what sociology professors may say, this is economically a bad idea. It is known that the entrepreneur is talented in production. There is no reason to believe he is talented in charity. He has an inarguable eye for opportunity in investment. He may very well be no more competent than any other bloke when it comes to giving aid. In reality, it is almost assuredly true that he would do a far greater service to the poor – which is to say, would raise their standard of living by a far higher amount – if he would use this money to reinvest in research and development to continue to make his automobiles more affordable, or to add new safety features, or to market a line of trucks, or whatever else he discerns is a wise productive investment. Remember that, if he sells a million automobiles a year, then for every dollar by which he is able to reduce the price of his automobiles the poorer people save a million dollars. Simultaneously, his sales will increase, so he will become richer, and have more money to reinvest. That’s economics, and it works.

When entrepreneurs reinvest accumulated capital and thereby lower the cost of consumer goods, they have another effect which is even more profound. By raising the ratio of value produced to labor required, investors raise real wages for just about everyone. This means that while people need to pay less money at the store to get the things that they want, they also take home more money from their standard day job. That’s a compelling argument against corporate charity and for corporate investment from the standpoint of the working class people. As for those who are too uneducated, disabled, or disinterested to labor for a living, the argument is – believe it or not – even stronger. That’s because it is an empirically demonstrable fact that donations by ordinary people to private charities actually rise super-linearly with income. This means when people make more money, they give even more of the money they make to charity. Thus, a successful investment in research and development will in the long run raise charitable donations more than if the same amount of money were simply given directly to charities – and yet it will do so without the need for criminal deception and the taking of other people’s money. So why don’t these do-gooder corporate executives who want to help the poor start by helping their employees and stockholders, and let people donate to charity with their own money?

One can speculate further that there is yet another mechanism by which corporate charity ultimately reduces charitable contributions, and that mechanism is uncertainty and lack of information. It is assuredly true that, when people donate to charity, they value knowledge of where their money is going, and want to know that it is being used effectively. They want to know how much of their income they donate, and smoke and mirrors surrounding charity will cause skepticism. It is therefore very likely that corporations which engage in charity using money taken from investors without their direct knowledge or consent really discourage other people from donating explicitly and thus reduce total donations. In much the same way that people tend to avoid taking it upon themselves to help the unemployed and homeless when governments claim to provide protection, so also they probably scale back charitable donations when corporations claim to do it for them. This reduction in charity is perception-based, not results-based. So when governments and corporations fail to provide the benefits they claim, and the downtrodden are left to suffer, nevertheless members of the community do not respond, do not take up the burden of charity themselves, because they are told someone else is taking care of it, so it must be someone else’s fault. A mixture of pathological blaming and self-righteous grandstanding takes the place of real work by individuals to help their fellow men, and everyone is worse off.

Finally, corporate charity is used as a rationalization for bad corporate policy, rent-seeking, interference with public policy and government officials, and generally poor quality of products and services. It tends to be a last-ditch effort by inefficient executives to avoid the progress inherent in a free market. Suppose one company is able to sell a product for ninety dollars, while another sells it for the slightly higher price of one hundred dollars, but has a better reputation due to engaging in more charitable programs in local communities. That sounds nice, but almost certainly the latter company’s contributions really do not constitute ten percent of its revenue. Therefore, consumers would do better to buy the cheaper product from the less charitable company and donate just some of the money they save. Some of them will do this, but others will make the mistake of falling victim to feel-good reputation-building that obscures real market efficiency. A greater good is done for a greater number of people by pursuing the most efficient, not the most heartwarming economic goals.

Thus the executive who commandeers funds entrusted to him by others and uses them for his own purposes – even ostensibly charitable ones – is presented with an incentive structure which rewards grandstanding and hollow self-promotion, while the executive who commits the investors’ funds to their intended purpose is required to produce real benefits for the consumers in order to stay afloat. This leads us to a final and critical point which those of you who know me well may have realized was coming from the beginning: So-called corporate “charity” is not charity at all. It is avaricious crime which damages the people it claims to help and helps the people it claims to damage. Executives who presume to achieve moral superiority by being sacrificial with other people’s money are not generous; they are vicious. The particular charities which they happen to favor are deemed worthy of everyone else’s support. So if an executive happens to feel especially strongly about one kind of cancer because of a death in his family, others who suffer from a different cancer must see a loss in funding because the executive is quite happy to steal from the populace and redirect contributions to his favored cause. As a result, charity organizations focus less on creating real results which they can demonstrate to the average person and more on befriending the higher-ups. So-called corporate “charity” robs the investors who risked their money to support entrepreneurship, raises costs to consumers, lowers employee wages, corrupts charities, empowers executives to an even greater extent, and ultimately does exactly the opposite of its purported goal: getting money to charities to help people in need.


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Dangerous anarchists undermine the social order in my local community.

September 26, 2010 3 comments

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Hi friends. I’m going to experiment with taking a more casual attitude towards the Worst-Case Scenario for a while. This means that the blog posts will not be as in-depth or researched as usual, and will mostly contain comments on the world as I think them up. However, the positive side to this is that, hopefully, I’ll be able to post more often, perhaps even as much as once a day. To kick off that theme, I’d like to tell you a story about a very terrifying event I witnessed yesterday. A gang of shameless anarchists disrupted the social order and broke a number of very important and long-established laws, including committing multiple severe felonies, without the slightest regard for the damage they were doing to their community. Here’s how it happened.

I was walking back to my house from Golden Isles Coins and Collectibles after purchasing a Krugerrand when I spotted the first anarchist. He was a small Latino boy of between five and seven years, sitting at the end of his driveway under a sign defiantly declaring, “Lemonade 50C” [sic]. The stand did not display any health and safety rating, so I was forced to conclude the local health inspector was unaware of the foodstuffs being sold. What’s more, the child clearly was not old enough to be working even a part-time job under child labor laws. Now, this is not necessarily damning. After all, he may not have been technically employed, since he was personally running all of the trade. Yet that in itself raises another question – where was this young man’s business license? Clearly, he wasn’t filing any 1099 forms or reporting any of his gross income to the Internal Revenue Service. Finally, he had no understanding of the need to tax prepared foodstuffs at a rate higher than the state-wide sales tax, as is the law in North Carolina. Indeed, and the crime was widespread: A few feet away I saw another person, an older Latina woman who was no doubt complicit in the illicit business being advertised. She was chatting absent-mindedly with a neighbor in Spanish as a deliberate affront to American values.

This experience was disturbing enough, but what I saw about fifteen minutes later was much worse. As I drew near to my house, I spotted a young black man of at least eighteen standing on the sidewalk, with no intention of using it for its appropriate public purpose, and waving a cardboard sign that said, “Car Wash $5.” I couldn’t believe my eyes – two blatantly illegal business operations in one walk from the gold store. I stared across the street to where the man was pointing, and sure enough there was a full gang of laborers washing a car in a parking lot. There was no one present above college age, and they did not appear to be reporting to any manager or supervisor. A single individual among them collected the payment from cars that drove in, but as far as I could tell she was not in a position of authority so much as in a flimsy trusteeship with the rest of the laborers. Essentially, it was mayhem.

As far as what laws these hooligans were breaking, it’s hard to even know where to begin. As I said, they weren’t funneling their money through any particular business head, so there was no accounting and no clear legal personality should their company be sued for poor service. Worse than that, though, was the complete absence of any government guarantee of good service in the first place. They lacked the required North Carolina car wash license which is used to ensure that gullible car owners aren’t victimized by devious car washing services such as this one. I seriously doubt that they even had a North Carolina business license, what with no manager and all. Of course, just like with the lemonade black market, none of this income was being reported, and the sales of the services were not taxed. But that’s not even the worst part. No, I didn’t see the true horror of all this anti-social behavior until I had observed their process for some time.

After much consideration, I found the utterly horrifying bottom line is that, from my best estimates based on the number of participants and the rate of five dollars per car, these laborers were not even making the federal minimum wage. The repercussions of this kind of exploitation are extraordinary. If they had a business owner, he would lose his business license and possibly go to jail for his heartless exploitation of them. Unfortunately the business had no owner since it was just an impromptu anarchist cartel, so I’m not sure whom I ought to excoriate, revile, and despise for the fact that these laborers were being savagely exploited. I think I will try blaming the customers for giving money to the poor slaves without educating them on the damage that is done by sub-minimum wage work. I may even have to send an email to the local car wash workers’ union, who will hopefully be able to help them by requiring them not to sell their services anymore. It takes a lot of activism and effort to effect positive social change, but rest assured, loyal readers, I will do whatever it takes to ensure that these oppressed laborers are empowered and their seditious violation of social order is corrected.


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Mandated spending is pushing on thread.

August 31, 2010 8 comments

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The folks over at Econ Stories made history in January of this year when they released Fear the Boom and Bust, the first popular, Ke$ha-endorsed rap video about economics. The video depicts world-renowned economists John Maynard Keynes and Friedrich August Hayek arguing about how the federal government’s fiscal and monetary policies affect the “Boom and Bust” business cycle, focusing on the parallels between the Great Depression and the housing and lending collapse which began near the end of the Bush administration and has continued throughout the Obama administration.

As with any rap, the main feature of the video is its lyrics, which contain the topic of today’s discussion: “Your focus on spending is pushing on thread.” This line is a rather esoteric reference, by way of clever metaphor, to monetary asymmetry. These are daunting words, but they actually refer to a very intuitive concept which has eluded policy-makers and even many economists for over a century. The aim of this post is to help the average observer understand just what is meant by the phrase “pushing on thread,” as well as to provide a conceptual base for further investigation of how ignorance of economics has had grave consequences for nations around the world.

The best way to discover economic principles is through thought experiments that investigate cause-and-effect relationships. Suppose, for example, that the average individual eats out at restaurants or bars about twice a week. If the government were to impose a law mandating that no person may eat out more than once a week, it would obviously have a negative impact on economic activity. In fact just about everyone can guess this if asked. Unfortunately, not so many of us can really explain precisely what is meant by “economic activity” or how the government’s new rule reduces it. Nevertheless, we understand instinctively that economic activity must be depressed by forbidding people from eating at restaurants.

What actually happens in a situation like this is as follows: Consumers, who at any given time have only a certain amount of liquid assets (money) they can spend, are willing to spend some of their assets at restaurants. However it may be that they decided to eat out twice a week, that’s what they’re willing to do. When the government declares that they may not do this, it prevents economic transactions from occurring. This is “bad” for one simple reason – people wanted those transactions to occur. Specifically, restaurant owners and restaurant customers wanted to make an exchange of money for food. They wanted to do this because each of them valued what the other had more than what they were giving. The customer would rather have a meal, and the owner would rather have cash. If the transaction occurs (the customers eat at the restaurant), everyone feels better off than before. If the government prevents this, economic activity – specifically, the exchange of assets in a beneficial way – is diminished.

Such a law won’t cause all of the consumers’ wealth to go to waste, of course. By preventing people from patronizing restaurants, the government induces them to do something else with their money. However, whatever it is that they decide to do, it is important to remember that it will always be their second choice. They would rather have spent their money on eating at a restaurant than whatever they spend it on instead. Therefore, the value of what they buy with the money they would have used at restaurants will be less to them. They will be worse off. Similarly, the restaurant owners will be worse off, even if they leave the restaurant industry and take up another profession. This is their second choice profession – it was not the most appealing and profitable venture for them. The transactions that people wanted to make to increase their lot in life have been prevented by the government, and whatever is substituted is by definition less beneficial.

Thus it is now clear precisely how a government mandate against eating out more than once per week reduces economic activity, in the sense of forcing a real reduction in beneficial transactions. The concept of pushing on thread enters if the government attempts to employ the reverse idea. Suppose, now, that a law is passed which requires each person to eat out at least three times per week. Remember the assumption that the average individual eats out twice per week. If limiting the amount that people can eat out has the effect of reducing economic activity, perhaps mandating that people eat out more often will increase economic activity. Certainly, restaurant owners might tend to think so. As there will be more transactions in the restaurant industry, revenue will go up for restaurant owners, some of which will be passed on to their employees. Indeed, more restaurants will be built, and that will create jobs in construction, cooking, and waiting. Consumers will have more meals, and probably better ones, too.

It would be great – right? Not at all. Mandating more consumption of products and services does not have the opposite effect as mandating less. If anything, it actually has the same effect, as total per-capita product still declines. This is the essence of the “pushing on thread” metaphor. If the government’s policies impacted the economy in a manner that were so easily manipulable and reversible as, say, a door – pull to open, push to close – then it is doubtful such highly educated experts would be hired to determine the government’s policies. Instead, though, the effects of policy are complicated, and the more they are analyzed, the more depressing the conclusions become. Mandates and regulations pull down, but can not push up, on the health of the economy.

To see how this is so, recall that consumers have only a certain amount of money to spend at a time. They must budget this money somehow; spending infinitely is not an option. Therefore, as people are forced to spend more and more at restaurants, they must by definition make sacrifices elsewhere. Perhaps before a person went out to eat twice a week and went to the theater once. Now he goes out to eat three times, but stops going to the theater to compensate. This, again, is not an even trade-off. He is actually worse than before, because he has stopped doing something he wanted to do – going to the theater – in favor of a second choice option. He didn’t want to spend all that money at a restaurant, so he is by definition worse off if he is required to do so.

Similarly, the business owners also take a hit in productivity. Obviously the owners of pre-existing restaurants will see a rise in profits if a law were passed requiring more visits to restaurants. Yet what is also true is that the owners of theaters must see a decline in profits, as well. As restaurants are built in the weeks and months after the law is passed, so also theaters are closed. Small business owners and their employees will shift industry. People will quit their jobs as theater directors and go to work in food service. Again, this is a second choice. Again, it is by definition worse than what was in place before. The converts from other industries to the food industry are taking jobs they weren’t trained to do in order to satisfy a fabricated demand that doesn’t really exist except that the government requires that it does.

Economists and politicians may preach about the stimulus effects of increased spending in the restaurant business. The newspapers scream headlines about the new jobs created by constructing more restaurants to meet the growing demand. Yet all of this is in the spirit of the broken window fallacy, commenting on the visible benefits of a transaction while ignoring the unseen opportunity costs. The idea put forth is that any economic transaction is by definition a good one, when in fact only a voluntary exchange benefits both parties involved. When praising the activity generated from a mandate to consume, it is necessary to ignore or dismiss the activity which would have occurred in the absence of the mandate – and that activity would have been preferable to both consumers and producers.

One might imagine that policymakers and politicians had by now come to understand the lesson in this simple parable of restaurants. At the very least, they certainly have hired economists and analysts who are too educated to fall for the basic fallacy of pushing on thread – of assuming that the opposite of an action which produces a result will produce the opposite result. Since elected officials tend to be of above average intelligence and education level, and since the federal government has many panels of experts with decades of experience in economics, it is to be expected that, although government policies may not always be perfect, they aren’t as utterly naive as requiring people to eat at restaurants and then declaring an improvement in the economy.

Aren’t they? It seems not, as the past three years have revealed an ever-increasing role of government spending and government-supported consumer spending in the name of “stimulating” the economy, without much consideration for the fact that it is impossible for such policies to increase total productivity at all. Remember the Bush package, when you and your significant other got mailed a check for six hundred dollars in order to stimulate the economy? The stated goal of this policy decision was to prevent an economic collapse and help boost GDP in the face of an expected moderate decline.

Well, it didn’t work at all. GDP ended up dropping far more than predicted, not in spite of the stimulus, but because of it. In fact, Bush’s idea failed so completely that Obama expanded upon it and extended it to affect more people. At every turn, with every new stimulus program, of which there have been about a half dozen since the housing crisis began three years ago, the federal government has sworn that there would be a demonstrable increase in GDP as a result, and every time real GDP (adjusted for inflation) has actually fallen.

This is by no means the extent of the damage – examples of government destruction rationalized as construction abound. It turns out that Barack Obama actually pulled the “mandate that people eat out” trick, only he did so with cars. The infamous Cash for Clunkers program, which one might argue is better termed “the General Motors bailout,” required Americans to buy new cars – with their own money, funneled through the federal government by taxes. Essentially, Obama offered a subsidy, funded out of tax-payer money, for people to scrap old cars and buy new ones. The program was sold on the claim that the act of buying new cars would spur economic growth.

It did not accomplish this, and it could not have under even the most generous interpretation. The philosophy of the program was flawed at its core, because it presumed that the activity generated by purchasing new cars must be good activity – ignoring the fact that, if it were beneficial to buy a new car, people would simply do that on their own. By taking tax dollars, which are of course collected by force, and demanding that they be applied to the purchase of automobiles, the government incentivized allocating resources to one particular sector of the economy, but by definition took resources away from other sectors where consumers would rather have used them. Requiring that people spend their money on a new car is no different from requiring that they spend it at a restaurant, and the damage done is exactly the same. Whatever else people would have spent their money on instead if given the choice, that was better for them than the purchase they were forced into. Ultimately, though, this was lost on policymakers, because they rationalized their decisions by observing the economic activity of buying cars and ignored everything else that money could have been used for.

When the government gets worried by how much of people’s money it is taking to fund purchases they didn’t choose to make, it has another card to play, which is monetary inflation and deficit spending. For a hundred years, Keynesian economists and federal-level politicians have struggled to convince the world – both the people in it and physics itself – that monetary policy allows the government to spend money it doesn’t actually have, if it’s careful enough. All manner of nuanced methods have arisen towards this aim. From the esoteric quantitative easing to tried-and-true manipulation of bonds and printing presses, an academic field and a sector of industry has grown up around selling the notion of the free lunch. The government, it is claimed, can fund programs with other methods besides simply taking money from individuals.

This, unfortunately, is not true. The government cannot create wealth out of thin air, no matter what elaborate practices its banks may employ. Whatever government money is not taken from individuals expressly through taxation is ultimately taken through inflation, the devaluation of savings accounts. When the government bails out banks with trillions of dollars of unofficial spending, this money is taken from the savings accounts of all Americans, especially the middle class, whose combined liquid assets represent the bulk of non-industrial capital. Literally, dollar bills and other written representations of money are created by the government, which the elites call “injecting money into the economy,” and the result is that the value of the dollar declines.

As the dollar is weakened, the ability of savings to buy real products and services decreases proportionally. That means that a person who used to be within a month of having enough money saved up to buy a boat, or who had savings to support his family for a year in case he lost his job, or who was preparing to send his children off to college, is now able to buy less than he otherwise would have with the same amount of dollars. This, then, is the cost of the bailout, and fits the exact same model as the fabled restaurant mandate. The government forces individuals to forgo purchases they otherwise would have made voluntarily in order to pay for a mandated bailout of corporations whose unwanted products and services failed to produce profits – all in the name of stimulating the economy.

The economic crisis has lead to the government fully doubling the monetary base in just a few short years. The long-term consequences of this will be the establishment of recession conditions as the “new normal.” The economy will not improve – it cannot improve – so long as the government continues its policy of mandating spending at levels above what would naturally occur. The American middle class individuals do not want to dig into their savings to bail out enormous banking corporations that have mismanaged their money. They do not want to buy new cars at a time when their income level is uncertain and the bare necessities are of immediate concern. When the government disrespects their decisions in managing their finances, it is only destroying any hope of recovery. Policies that focus on spending are pushing on thread, trying to create a stimulus but ultimately just allocating precious resources where they don’t belong. If Americans want a better future for themselves, the only option is less spending, less mandating, and less government.


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Symbols of Freedom: Gadsden flag, circled “V” on Facebook, and more

August 12, 2010 15 comments

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A topic that comes up quite frequently in discussion of libertarianism, market anarchism, and other pro-freedom circles is the symbolism associated with the movement against socialism, tyranny, and government as a concept. What kinds of symbols do libertarians use? Where do they come from? How do I get that “V” in a circle on my Facebook page? These are all legitimate – and important – questions. To help shed some light, I’ve compiled a number of popular symbols of freedom on this blog and explained their origin, meaning, and use today. I will not focus so much on the classical depictions of liberty such as the cuneiform amagi or the lady Liberty herself but rather on the more recent images and characters which circulate the internet today, such as the gadsden flag, the circle v, etc.

The Gadsden Flag


What is its significance?

This flag has a rich history dating all the way back to Benjamin Franklin who in 1751 suggested the symbol of the rattlesnake to represent American resistance against the British crown. Franklin was explicit in his revolutionary beliefs long before revolution itself seemed a realistic possibility, and chose the rattlesnake for the contrast between its generally non-aggressive nature and its ability to be extremely, violently forceful when stepped upon. When the myriad personal and trading vessels that formed much of the U.S. navy began intercepting British warships, they flew a flag designed by Colonel Gadsden which depicted a rattlesnake and the words “DONT TREAD ON ME” to indicate their defiance of government control. This formed the basis for the modern day Gadsden flag which has seen huge popularity during the Tea Party protests of the late Bush administration and the Obama administration. It is in some sense a patriotic symbol by association with the the American revolution, but it also serves as an alternative for the many Tea Partiers who refuse to fly the Stars and Stripes for the appeasement of tyrants.

Should I use it?

Probably so! In terms of recognition and historical significance, nothing beats the Gadsden flag. By choosing to fly an American flag which is not, and has never been, a flag of any government, nor ever been used as a symbol of conquest and imperialism, you can send a clear message that you are not proud to be ruled by an institution of regulation, control, and abuse. The only negative to flying this flag is that, due to its extreme popularity, not everyone who has adopted it is actually consistent with the original message behind the flag. It is at its core a symbol of defense and defense alone.

What are some uses and variations?

The Gadsden flag’s primary use is as a physical flag displayed at Tea Party protests. It has also become very popular as a Facebook profile picture and a bumper sticker. It is frequently combined with the conventional anarcho-capitalist flag to produce the Gadsden anarchist flag. One of the most interesting variations I’ve seen is the three-dimensional Gadsden flag. Finally, there are an increasing number of tattoos depicting just the rattlesnake and the words “DONT TREAD ON ME.”

The Anarcho-Capitalist Flag


What is its significance?

This flag is really quite simple. All of the anarchist flags are split diagonally, black on one half and another color on the other. This descends from the pure black flag of anarchy – since black is the absence of any color, it follows that a black flag represents the absence of any government. Gold is the color of anarcho-capitalism as a symbol of the prosperity which invariably results when governments do not interfere with the voluntary exchange of goods. Due to its simple elegance and very well-defined message, the anarcho-capitalist flag is extremely popular.

Should I use it?

Definitely. This symbol is free of any ambiguity, as it has never been understood to represent anything other than total non-consent to all government control and an absolute respect for the rights of individuals to retain or trade their private property at will. However, there is one drawback. It lacks somewhat in recognition due to the fact that there are no out-of-the-closet anarchists in high public office or on mainstream networks.

What are some uses and variations?

It’s not too common to see this flag actually printed and flown, because anarchists typically do not see a need to fly flags. However, the image has been very popular on the internet as a base for all kinds of creative expansion. It’s so very simple, each anarchist wants to add an idea or message that he or she feels needs to be declared.

V for Vendetta


What is its significance?

Perhaps one of the most hotly-contested anarchist symbols, the circled “V” drawn in blood red against a black backdrop originates from the 1980’s series of comic books V for Vendetta. The symbol became wildly popular shortly after the release of the 2006 film by the same name. In both, the protagonist identifies by the name “V” and draws the circled letter to represent his anarchist cause in resistance against a fascist state. However, the message carried by V goes beyond one of vindication and as far as vindictiveness. He is frequently depicted using aggressive force against people who seem at most incidentally related to the fascist regime, especially in the movie. Nonetheless, V does express regret for the collateral damage he causes and states that he believed it to be necessary to achieve a freer society.

Should I use it?

That depends on how revolutionary you are. If you are a pure voluntaryist who objects on moral grounds to all aggressive force, you probably should not use this symbol, because the “Vendetta” part of “V for Vendetta” clearly refers to a violent revolution with collateral damage. On the other hand, if you see freeing society from its tyrannical government to be a paramount goal towards which all feasible methods must be employed, this may be the best symbol for you. It certainly does have very high recognition and an umbrella of coverage due to including both anarcho-capitalists anarcho-socialists.

What are some uses and variations?

The circled “V” is sometimes drawn on protest signs along with the anarchist clenched fist to stand out from a crowd as opposing both “sides” of a political issue. The Guy Fawkes mask worn by V is also popular to wear to protests because it protects the identity of the anarchist. This, however, can lead to police becoming agitated for no good reason.

V for Voluntary


What is its significance?

This image was created just a few short years ago by a passionate libertarian after the “V for Vendetta” film was released, and it has taken off like a rocket. Its success can be attributed to the elaborate amount of thought and attention to detail in what appears at first to be a remarkably simple design. The “V” is split into half gold and half black with the anarcho-capitalist flag in mind. However, instead of simply depicting a split or divison as both the letter “V” and the anarcho-capitalist flag do, V for Voluntary actually joins back together at the top to complete a circle, representing the unity and cohesion that follows from a non-violent society. Most impressively, the joining of prosperity with anarchy is actually a handshake – the gold side folds over the black side as two hands gripping one another, which draws attention to the literal contract theory of a capitalist society and also to the brotherly harmony of voluntaryist thought. Thus the ultimate message conveyed by V for Voluntary is “In freedom, people become united and prosperous.”

Should I use it?

I can’t think of any good reason not to. It does not have extremely widespread recognition due to having been created just a few years ago, but voluntarism is a growing philosophy and you can help it along.

What are some uses and variations?

Profile pictures! Probably the best way to help others understand the message of freedom is to utilize social networking, both in the literal sense of sharing content with friends and also by highlighting similarities between libertarian thought and people’s personal views. Voluntarism is the perfect path for this because the right to make choices without being forcibly controlled is valued by many people who are not politically active. The purity of this message also makes V for Voluntary tattoos a good choice for the long run.

Circled “V” and circled “A” characters


What is its significance?

This topic amuses me because it draws the plurality of all searches to my blog. The presence of circled “V” and circled “A” on Facebook names recently has caused quite a stir. They are gaining rapid popularity as more and more young people have come to realize that the government cannot be trusted to give them happy lives. The “V” stands for “voluntary” and the “A” for anarchy, with all the usual implications of those words.

Should I use it?

As long as you are comfortable sharing your political views on Facebook, go for it. It will probably get some attention from your friends and will allow other freedom advocates to identify you on community pages. You may get some random friend requests from people you don’t know who also bear the symbols, but that can be fun and informative.

How do I get the circled “V” or circled “A” on my Facebook page?

These characters are Unicode 9398 and 9419. In case you don’t know what that means, just copy and paste them from here: Ⓥ Ⓐ

From your Facebook home page, click on “Account” and select “Account Settings.” Find where it says “Name” and click “change.” Add the character of your choice to the end of your name and click “Change Name.” Voila! You are now a certified freedom advocate.

So which ones do you use?

I use the Gadsden flag and the circled “V” symbol on Facebook. I haven’t found anything creative to do with any of the others yet, but I may eventually get a V for Voluntary tattoo when I have way too much time and money.


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Gadsden and Anarcho-Capitalist Flag with Circle V Symbol

August 1, 2010 2 comments

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I am renouncing all rights to this image of the Gadsden flag mixed with the Anarcho-Capitalist flag and featuring the Circle V symbol, so please use it to spread the message of freedom. Click the image to view the full-size version.


If you liked this post, please share it on your Twitter or Facebook page. You may also like Gadsden and American Flags Merged in Public Domain. Check out the index page for more from the Worst-Case Scenario!

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How to Stop All Oil Spills – And Why the Government Has Never Done It

May 25, 2010 3 comments

To listen to the audio version, play the video below. To read the transcript, simply scroll down.

All right, friends. I’m supposed to be running a level-headed show here, but tonight, I am mad. I am very mad, because once again the demagogues are creating a racket by touting themselves as defenders against a real problem that Americans face and instead creating more of the same problem. It has now been 36 days since the Deepwater Horizon oil spill began, and there is no end in sight. Dozens of millions of gallons have already entered the Gulf, which is probably about how many dollars the news media and lawyers are making right now complaining and failing to produce any solution. Of course no solution has been found, because the government’s policies towards drilling ignore philosophy and human nature.

At every turn, at every new spike in pollution of the air and the sea by some careless mega-corporation, the federal government has responded by issuing greater regulation and tightening controls on industry in a racketeering attempt to say they did something. Better to pass an imperfect law than no law at all, right? But their strategy has never worked. There’s a million and ten ways for a company to pollute, accidentally or otherwise, and the nature of legislation is to be reactive. To stop pollution, we need policies that are proactive. We need to be able to anticipate catastrophic environmental damage before it occurs – not yell and legislate about it afterwards. The government cannot accomplish this. For the past century, it has been passing progressively more and more laws regulating businesses that deal directly with the environment, and yet oil spills keep happening, each one seemingly worse than the last. The polar ice caps are still melting, and the only response the feds have ever conceived is more barriers to entry in industry, more government-mandated inspections of rigs, and more taxing and spending. This has gradually increased the real cost of oil for middle class Americans and has never stopped corporations from inflicting collateral damage on the environment through misuse of communally-owned resources.

All of that, though, I have learned to begrudgingly accept. What has gotten me so enraged tonight is the fallacious sense of inevitability with which the whole ordeal is discussed. As soon as the extent of the damage of the spill came to light, the liberals immediately responded with their demands to punish the big, mean corporations for damaging our environment. They said we need more regulation and more government action against big business to show British Petroleum that they can’t just pollute our waters without some accountability. Then the conservatives replied with their predictable economic concerns. “Wait!”, they said. If you try to punish the oil companies by fining them and restricting their business, the cost will just roll over to consumers, raising the price of gas! Barriers to entry will reduce competition in the industry even further, and it will be more difficult for average Americans to maintain their standard of living. That’s the argument you hear – and you here it day in and day out. Take your pick, they say – either allow the corporate big wigs to wreak havoc on society and the planet without any accountability, or cripple the oil industry in regulation and let the American middle class take the hit anyway. And they give you those choices as if it is just natural – As if that’s just how things are supposed to be!

I am here to tell you that I don’t buy it. I don’t accept this dichotomy. The Republicans scream to protect the industry and the Democrats scream to protect the planet, and the result is that neither achieves any success. Government swoops in and does what it does, and when all is said and done, we keep having oil spills and the price of gas keeps going up. It is time for a philosophically different approach to drilling for oil. It is time to implement freedom and responsibility – to allow businesses to compete with one another in a free market to drive down the cost of oil while at the same time placing upon them the responsibility to maintain their own resources, free of pollution. Over the past century, we’ve had plenty of Democrats and plenty of Republicans take office and enact their plans to absolutely no avail. It is time for a new solution – the Libertarian solution.

In a Libertarian’s perspective, the Gulf oil spill is just one of millions of examples of what’s known as “The Tragedy of the Commons.” The tragedy goes like this: When individuals use resources that are owned by the community, it is in the interest of each individual to use the resources in a manner that is not in the interest of the community as a whole. The Commons gets depleted, because each person takes from them recklessly, conserving nothing for the future lest the others should get it first. To a Libertarian, the solution is self-evident: Do not have a Commons. When every individual actually owns a certain portion of the resources, it is in each person’s interest to conserve his own property, and he does not have the right to damage or intrude upon another person’s property.

What I am telling you here is that the only way to prevent oil spills is to privatize the oceans and release all government control of the oil industry. It isn’t hard to achieve. Simply auction off the waters in sections to whomever will develop them. Let the proceeds help pay off the federal debt. Each company or person that buys a section receives a deed to it just like land owners do. Then the protocol for polluting someone else’s waters is just as it would be dumping oil in your neighbor’s backyard: You can’t. If you do, your neighbor will sue you in a civil court.

In essence, what this will achieve is the complete freedom of the oil companies to compete amongst themselves to find the most efficient way of delivering oil to Americans cheaply while also internalizing 100% of the costs associated with pollution. By disincentivizing pollution instead of yelling about it, we will put an end to oil spills. No longer will companies be able to undertake careless practices and make tax-payers and their neighbors accept the consequences. There will be no more discussion of a “cap” for collateral damages; there will simply be no collateral damages. Anyone who commits an act of pollution will be taken to court by a complainant who will actually own property that suffered demonstrable damage. This contrasts sharply with our current system in which British Petroleum is essentially on trial against the government for crimes it allegedly committed against the whole planet. When all resources are in the hands of well-defined owners, there will be no more ambiguity of finger-pointing, no more argument about who hurt whom and how. Pollution will be unprofitable, plain and simple.

Perhaps you wonder, if this solution is so simple and effective, why it has not been tried before. The answer is just as obvious as freedom itself. Neither the government nor the corporations have any interest in adopting a policy of freedom and responsibility, so no such policy is ever considered. The concern that government regulation will harm big business is in itself a racket and a false source for angry punditry – government regulation is the source of big business. Does anyone know when was the last time that a new oil company was started? Of course you’ve never heard of a start-up in the oil industry making it big. The barriers to entry are insurmountable. The more the government legislates to try to save the environment, the more impossible they make it for anyone to get approved to start a new drilling project to compete against existing corporations. Through environmental demagoguery, they systematically reduce individual freedom. In doing so, the government creates an oligopoly through which all American industry is dependent upon a select few oil companies. These companies are in a position to demand whatever they want, because the American lifestyle cannot persist without oil. As such, they are never held truly accountable because to punish them as they deserve would cripple society – and so, there is no responsibility, either.

To privatize the oceans and regard them as resources to be used freely without causing damage to other people’s property would break the intimate relationship that corporate lobbyists have established with legislators. When legislators no longer interfere in business, corporate lobbyists no longer have any reason to win their favor. The billions of dollars spent on maintaining large legal departments and publicizing court cases to pressure legislators and raise public concern would no longer be necessary. The savings would roll over into lowering gas prices for you and me. The racket would end. We would stop seeing Congressmen and business executives speaking on the news every day about the ongoing controversies and the need for taking some unspecified action to calm everyone’s anger. Instead of shouting at bad behavior, we’d be disincentivizing it. True freedom and responsibility is the only way to end the tragedy.

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