Tag Archive | USD

Libertarians and America-centrism

If there is one thing that nearly everyone who has studied the matter agrees on, it’s that United States global dominance is on the executioner’s block and cannot last forever. This has been said by Ron Paul, who repeatedly pointed out that the militaristic propping up of the USD is unsustainable, but libertarians are not the only people saying such things. It’s well-known that, around 2030, China will have passed the United States economically, and by 2040 technologically and militarily. Regardless of the angle we take–whether internal collapse or external excellence–the conclusion is inevitable: the U.S.’s enjoyment of its time as “the world’s only superpower” is coming to a close.

Earlier today, I defended points made by Libertarian Party Vice Chair Arvin Vohra (who routinely #triggers people who want to call themselves “libertarians” without actually abiding libertarian ideology, as well as those who cry “Muh marketing!” and threaten to take their ball and go home) by asserting that it really doesn’t matter whether Americans find Arvin’s statements palatable or not. He’s right. And the consequences of everyone else being wrong (e.g., the collapse of the USD and American military dominance) will happen whether people find his message agreeable or not.

In fact, the most common whine directed at Arvin is that he’s right, but they wish he would be more diplomatic in expressing it. They assert (without evidence) that statements like his are the reason the LP isn’t taken seriously, are the reason the LP doesn’t win elections, and are the reason the party’s membership is waning. These statements are made entirely without evidence and in full disregard of the obvious facts that the LP didn’t win elections long before Arvin came along.

The most glaring omission from such stupid statements like “This is the reason liberty will never be popular–Arvin is making unpopular statements” is probably the most American-centric thing a person can say. It’s true that Arvin’s statements are not typically popular among Americans, but Americans make up less than five percent of the world’s population. It’s absolutely stupid to act like that five percent is “all there is” or that the 5% are the only people who matter. It’s exactly that kind of attitude that makes people hate Americans–that horrific short-sightedness that cares only about what other Americans think, so much so that the speaker apparently isn’t aware that most of the world’s population isn’t American.

Are Arvin’s statements about the military unpopular? In America, maybe. We really don’t know. There’s been no study of that, so it’s impossible to make any credible analysis. Not much of the American population even pays attention to Arvin, and, of those who do, roughly half seem to be supporters. The other half, strangely, seem to follow him just to argue with everything he says. Being extremely generous, no more than 5% of the American population even knows who Arvin is, so even if we assume that half of those vehemently oppose Arvin, what we’re left with is half of 5% of 5% of 7,000,000,000. So even with unrealistically high numbers, no more than 8,750,000 of the seven billion people on the planet could possibly turn from libertarianism because of Arvin. And, again, since we’re using stupidly generous numbers, 8,750,000 of the seven billion people would also be turned to libertarianism because of Arvin.

And this is only in the United States. How do you think people in Pakistan react when an American political leader boldly speaks out against the crimes committed by the American military in Middle Eastern countries? How do the people of Russia react? The people of China? Half of Americans might get deeply upset that Arvin dared point out that the American military murders people, but the vast majority of Earthlings fiercely nod and agree–having seen and felt the sting of American bombs falling on their cities.

We can’t just zoom in on the United States and pretend like the rest of the world doesn’t matter–it most certainly does. And I know people would say, “But the American Libertarian Party isn’t running for election in the rest of the world! So it doesn’t really matter what they think in this regard!”

That’s wrong, though.

We are running for election with the rest of the world, and it’s an election for survival, peace, prosperity, and forgiveness.

The United States doesn’t exist in a bubble. And while it currently doesn’t matter what the rest of the world thinks, every indication is that we have only two or three more decades of this being the case, after which it won’t matter what America thinks. It’s hard to overstate the impact that being overtaken militarily, technologically, and economically will have, but, for the first time since its inception, the United States will truly be vulnerable to foreign aggression. And we won’t have the infrastructure, money, technology, industry, or military might to do anything about it.

The rest of the world is watching us put our vast industrial and technological might to use by picking on countries that can’t possibly pose a threat to us. They’re not happy about this. Even our oldest allies, like Canada, Australia, and the UK, aren’t happy with American hegemony these days. Saudi Arabia may be the only country in the Middle East that isn’t deeply pissed off at the United States. China certainly isn’t pleased with us, and neither is Russia. In fact, Russia drew a line in the sand around Assad and refused to let us topple him as we had done to so many in the past. That’s how fed up Russia is with our bullshit.

We have created lots of enemies, and many of them are eagerly waiting on the edge of the darkness, hungrily licking their lips and hoping for our defenses to fall, wishing to see us taken down a peg. And here’s the bad news: that is going to happen. There are only two ways of avoiding it, and we won’t pursue either course of action.

The best way of avoiding it is to stop the hegemony. Let cryptocurrencies thrive, withdraw all of our troops, and, at the very least, return to being a Constitutional Republic of limited government and pro-liberty. It would be even better if we went the Minarchist route, beyond classical liberalism, and best if we went full anarchism. All of these actions would create genuine prosperity, which would make us excellent trading partners, and which would in turn drastically reduce people’s reasons to want to see us destroyed. Because, of course, the thing about using might to enforce one’s position is that might fades, and, when it does, the previous ruler is overtaken and defeated. Look at Rome, Mongolia, the British Empire, and countless others, and know, without a doubt, that their people once thought that it would be impossible for their place as the rulers of the world to be challenged. We have the chance–but maybe not the time–to stop ruling with might, and to instead rule with peace, friendship, and liberty. We can lead the world not by bombing everyone and fighting countless indefinite wars, but by being loving and peaceful, and inspiring people to come to our land and enjoy the most freedom to be had anywhere on the planet.

The other, more immoral, way is to pre-emptively attack China before they can overtake us. I fear this is the route that we will ultimately go, probably around 2024 or 2026, when it is painfully obvious that, if nothing is done China will overtake us. I don’t think most Americans will be able to tolerate that, not when so many Libertarian Americans view the world in such American-centric terms that they don’t understand that “popularity in America” isn’t the same as “popularity.”

The United States is part of the world. It isn’t above the rest of the world, it’s not greater than the rest of the world, and it has no right to bully the rest of the world. We need to come down from our high horse now, not when we are knocked from it by competing countries that have overtaken us. The criminal who stops committing his crimes and apologizes before he is caught is forgiven to an infinitely greater extent than the criminal who only stops and apologizes after he is apprehended. And by the standards of almost everyone, the United States’ actions especially of the last 60 years have been indisputably criminal. Bombing hospitals, weddings, and the like…? We cannot hide from this. And one day–very soon–we will be punishable.

Is Bitcoin in a Bubble?

No. Next question.

Are Cryptocurrencies generally in a bubble?

No. A bubble is when investors drive a stock’s value beyond its actual value, distorting the market through their cognitive biases, and the inexorable market forces inevitably reveal this to be a sham, which plummets the value of the stock back to its market value. There are a few considerations to be addressed here, because a bubble is the result of “believers” recruiting people to the investment in speculation, and an ultimate correction that causes most people to lose lots of money. The 2007 recession was caused by the bursting of a housing bubble that was brought about by low interest rates as decreed by the Federal Reserve, which gave the illusion of economic strength and created easily-received credit. This was illusory because most people did not have the economic strength to purchase a home on the credit they received, defaulted, and caused banks to lose large amounts of entirely made-up money. Not to get too out there with it, but banks didn’t actually lose any money during the Great Recession, because when people take out loans, banks just invent that money out of thin air (no, really, that’s what they do–they just add the money to their ledgers). Then, when you pay back the loan they gave themselves or another bank in your name, you’ve converted that imaginary money into real money. It’s stupid, counterintuitive, and an obvious ripoff for us. But anyway.

It’s true that crypto believers are attempting to recruit new people to cryptocurrencies, but there are a few things to this that are exceptional and worthy of taking notice. First, this is part of a global battle against globalized tyranny, which we are seeing take place with Brexit, threats of withdrawing from NATO, the Catalonia independence referendum, Kurdistan, and even the Californian possibility of secession. Throughout the world, people are rising up and stating unequivocally that they do not want to be controlled by others. Since the western world is dominated entirely by the USD and by state control of the economy, we in the west have decided to attack the power structure that allows for this tyranny, rather than trying to eliminate the tyranny itself. Bitcoin, Ethereum, Litecoin, and DASH have done more to challenge government authority than 40 years of the Libertarian party. This will only continue going forward.

Because that’s what cryptocurrencies are–they are currencies just like any other, except decentralized and created directly by We the People. Although Spain sent police forces dressed in all-black to beat the hell out of people who advocated independence for Catalonia, we in the United States have… different methods. And we know that we cannot survive a direct fight with our government. We’ve learned this lesson from the Afghans, from Al-Queda, from DAESH, from Iraq, and from countless others. The American military machine has simply become too powerful to fight directly. It’s true that the military machine would probably be unable to ultimately defeat us all, but the resistance would be decimated very early on, and there would be no realistic chance of ever defeating the American military machine, just as DAESH has no realistic chance of ever doing so. This being the case, we must all rely on subterfuge and strategy. It is in this vein that cryptocurrencies were invented (and other reasons).

Rather than throwing away our lives in violent revolution against the state (which would only produce a new state in its place), the anarchist and libertarian communities (because there is a strong overlap between libertarian/anarchist communities and the crypto communities) went one layer deeper: to the currency that funds the monstrous beast. Naturally, the leviathan that inflate our currency to avoid taxing us into oblivion, relying instead upon the hidden tax of inflation, which not even one in ten thousand people is capable of identifying as the reason they are poorer, is not going to take this lying down. This is why other features of cryptocurrencies are so important. They can be held anonymously. The state has made it virtually impossible to buy cryptocurrencies anonymously (though it is possible on the Onion network, but you have to be careful not to throw your money away), but, once you have them, there are several ways to store them securely, safely, privately, and anonymously. The state cannot tax what it cannot find.

In that sense, cryptocurrencies and anonymous wallets like Jaxx (which, if I recall correctly, screwed people over with the BTC/BCC split, and may do so again come the SegWit2x hard fork in November, but I actually do avoid Bitcoin, so I didn’t follow it closely) function as offshore bank accounts for the masses. There’s a digital trail, sure, but even the best hackers and NSA spies will find it nearly impossible to track cryptocurrencies as they move across the digital space. In New Hampshire, to where I am moving (hopefully around January! Yes, that soon! You can help the effort to help me move from bum-fucked Mississippi to the Free State by buying my book from Amazon, for only $2.99 for the eBook or $7.49 for the paperback), you can go an entire day, buying your cigarettes and dinner and whatever else, without ever using a USD. It’s not untraceable, but it’s damned close. Other cryptocurrencies are rising specifically to be completely untraceable.

Just as importantly, the ledger, which contains all BTC transactions, is kept in full on every BTC miner. Just as importantly, just about any noteworthy wallet will have non-American servers. Remember when the government tried to shut down The Pirate Bay? Well… Remember, the one time they actually succeeded for a few months? There were copies of TPB’s full server data all over the place. TPB themselves even have servers in multiple countries, many of which don’t give a shit about piracy or the U.S. government. Cryptocurrencies are like that, except even less centralized–there are miners and servers everywhere. If it became necessary, the entire history of BTC could be rebuilt from a single mining node.

Consider the German hyperinflation of the early 20th century that led directly to Hitler’s rise. Overnight, the German government wiped out everyone’s wealth. Imagine going to bed a millionaire and waking up unable to afford a loaf of bread. While it wasn’t quite that drastic, it was extremely severe, and it has happened with every paper currency that we have a record of. If the government attempted to wipe out everyone’s digital wealth, they would fail, because even a single copy could be used to restore all of it. Let there be no doubt on this note: every single day, we are relying on the goodwill of our government to not wipe out our wealth in USD, and they could do so in minutes. If they did, there would be no way to restore that.

Believers

The only real correlation between the rise of crypto values and “market bubbles” is that crypto believers are recruiting people to convert their money from USD into BTC, ETH, LTC, and others. This is very, very different from convincing people to invest their money in one specific stock or another. It is true that people who convert their money now into crypto currencies are likely to see remarkable gains to its value–BTC has gained 19,000% since Bitcoin China first opened–meaning a $1 conversion at the time BTCC first opened became $19,000 today. That’s true, but it won’t be true forever. People who get in early enough (probably a period of time within the next 2 years) stand to make a lot of money, but the gains will level out as more people convert their wealth into crypto currencies.

By the typical standards, crypto currencies are certainly in a bubble, but the real question is whether it’s an artificial or real bubble, and whether it will burst. The answer is “No.” Cryptos are here to stay. Like so many other things, they represent Pandora’s Box–once opened, they cannot be undone. The abortion issue is another one. AI is yet another. Mind reading technologies are still another. Blockchain and digital currencies are certainly one, as well. There’s no going back now, and it was designed to resist state authority.

The crypto bubble isn’t going to burst because Brexit happened, Kurdistan happened, California secession demands happened, Catalonia happened. All throughout the world, people are resisting centralized control of their lives, and the most powerful control any government wields is its direct control of our lives through the very means we use to secure our lives and sustenance. Cryptos will certainly continue to fluctuate, but their general trend is an indisputable up. This isn’t some new market; it’s a currency. It’s meant to be a store of value for your money. I understand that people don’t like risk and uncertainty, especially, when it comes to their wealth, so even though the USD has steadily stolen wealth from them since its inception, has defaulted at least three times, and has been inflated to the point that we have a twenty trillion dollar debt, it feels less risky to most people to simply continue using the USD.

I’ll be honest with you, though. Your money is a lot safer in ETH and LTC than it is in USD.

And congratulations to Catalonia on their vote, though I suspect its too soon to congratulate them on independence. They haven’t won independence yet. They’ve simply declared war on Spain (well, to be accurate, Spain declared war).

The NES Classic & Economics

We anarchists and libertarians are bothered by a great many things, but one of the things that bothers us most–and that is almost universal among anarchists and libertarians–is the general economic ignorance that pervades the United States. We wouldn’t tolerate this ignorance in any other subject, but it serves the state’s purpose to keep us ignorant of economics (the manner by which we turn energy into product), so it’s a field that is touched only briefly–if at all–in high schools. The average American knows only that there’s a thing called “demand” and a thing called “supply,” and then their eyes tend to glaze over and words like “derivatives” and “inflationary tyreni index G7P 14.7” run through their minds.

So, first of all, forget all of that. Forget about GDP, forget about inflationary indexes, and forget about all the shenanigans that we have come to associate with “economics” now that we have given over control of the entire economy to a coalition of privately owned banks that operate with no Congressional oversight. All of that crap is fiction. They are obfuscations designed to confuse us and distract us. They are smokescreens designed to keep us disinterested in the subject, to make us feel ignorant and stupid, and to make us blindly trust in these experts who seem to know what they’re talking about. In reality, they’re just talking nonsense, like this guy:

I’m not kidding. That’s the average state economist. That’s the Fed Chairperson. That’s the Secretary of the Treasury. For the most part, they have just completely made this shit up and invented rules that don’t have anything to do with reality. It’s a game of Monopoly that they’ve invented and tricked us into playing, and they keep us playing by using complicated language and nonsense to convince us that we need them being the game’s referee.

Now, I am not talking about the fact that Nintendo has ceased producing the NES Classic. For those unaware, Nintendo recently released a mini-console for $60, which contained 30 classic NES games like Mega Man 2, Castlevania, The Legend of Zelda, and others–even some stupid ones like Balloon Fight that nobody wants. Naturally, the thing sold very well, but Nintendo notoriously has problems with supply and did the same thing with their Amiibos (which are little toys that interact with some of their games). Nintendo repeatedly failed to manufacture enough Amiibos to meet demand, which led to accusations that they were doing it on purpose (in fact, one can conclude nothing else, since they publicly addressed the problem and then did nothing to fix it).

This obviously created scalpers, and scalpers are getting a lot of criticism. Some enterprising individual pops into Wal-Mart, buys an NES Classic for $60, and then posts it on eBay for $100 (or whatever price), pocketing the profit. This is actually a good thing, economically, but it’s a band-aid to the situation. Realistically, Nintendo should be the ones directly increasing the price of the NES Classic, instead of continuing to sell them for $60. In fact, thanks to the scalpers, there is no shortage. Calling this a shortage is economically ignorant and incorrect.

A shortage is when consumers are unable to buy an item.

And there you go. What we have with the NES Classic clearly isn’t a shortage. In economic terms, a shortage exists when Demand exceeds Supply–when more people want to buy a thing, and there aren’t enough of those things to go around. In fact, scalpers have ensured that there isn’t a shortage. Rather than condemning them, we should be thanking them.

The people complaining about a “shortage” don’t really mean that they are unable to buy the item, do they? Clearly, they don’t. What they mean is “I’m not willing to pay that much for one.” This is a critical element of economic understanding: price is not some arbitrary thing. Prices are supposed to increase like this, as the increase in price offsets Demand. Again, this is obvious. Many people were willing to pay $60 for an NES Classic. Fewer people are willing to pay $110 for an NES Classic.

This means that, quite literally, supply exceeds demand, not the other way around. In reality, what we have is a surplus, not a shortage. A shortage exists when demand exceeds supply; a surplus exists when supply exceeds demand. Thanks to the increased price, the supply persists today, and the demand has been lowered.

There is a character in The Legend of Zelda: Ocarina of Time who sells Magic Beans to the player, and each purchase increased the cost by 10 rupees. The first costs 10 rupees, the second costs 20 rupees, the third costs 30 rupees, and so on. An increase in price because of high demand is a normal, expected, and beneficial part of economics, as it ensures that we never experience a shortage.

During the 1980s, the United States saw pretty severe gas shortages. Gas stations attempted to raise the price as the supply of gas decreased, but the Federal Government put a Price Ceiling on it and forbade them increasing the price beyond that. So, naturally, everyone immediately set their price at the ceiling (even if they weren’t yet that low on supply). As the cost of something increases, people’s willingness to do it or acquire it decreases, which drives them to seek alternatives (the same phenomenon causes heroin addicts to turn to krokodil, which would be averted if alternatives were made cheaper and more accessible by being made legal). Few people would have been willing to pay $100 for a gallon of gasoline, and so they might have taken that money and bought bicycles instead. Is it ideal? No, the ideal solution is to also increase Supply to re-lower the price, which will be necessary because some people have already chosen to go without because of the increased price. “No, we’re not going to go to grandma’s house this week, not for $20 per gallon. We’ll just not buy the gas at all.”

In the real world, some money is better than no money, and this is why producers can be counted upon to increase supply to meet the demand. Otherwise, they’re just leaving money on the table, and that money will go to someone else. This all has to do with diminishing returns, as well–at a certain point, because all goods are scare and finite, the cost of furnishing the supply gets too high, so the price of the good increases beyond the demand, and producers have to come up with alternative solutions for consumers. This is why we don’t have to actually worry about running out of gasoline: once we get up to $17 a gallon, so many alternatives will be cheaper that gasoline will be phased out naturally.

While it’s certainly bad to have gasoline at $100 per gallon, especially during the 80s, it’s preferable to not having gasoline available at all. If some family had to take their sick child to the emergency room, it’s infinitely better for them to be able to buy gasoline at $100 a gallon than to not be able to buy it. High prices are always preferred to shortages. Those people out there who really, really want an NES Classic can buy one, which is obviously better than their being totally unable to buy one.

Scalpers have performed the critical service of increasing the Price of the good, which in turn lowered Demand so that Supply exceeded it. I was just talking with someone at Jim Sterling’s website about it, and I’d pointed out that marking the item as “Limited Edition” would have made the “shortage” worse. This was before I’d thought about the situation enough to realize that there isn’t a shortage. Sure, one can’t buy one at Target or Wal-Mart, but one can buy one, and that is unequivocally not the case in a shortage.

The only real point of contention is that the thing costs more than they’re willing to pay. Hey, that’s not a problem. There’s a “shortage” of $10 ones, too, and $10 is my price point for one. Every single person out there has their own price point–has their own amount that they’d be willing to pay. Evidently, for most people that number is around $60. For some people, it’s around $120. For me, it’s around $10. The fact that there aren’t any available at my price point doesn’t mean there is a shortage, though. It means that I don’t want one of the things as much as other people do*. These people who want to buy one for $60 are talking about “shortages,” but there isn’t a shortage–their price point simply isn’t as high as other people, and because of the low supply the price of the good has increased beyond the price point as determined by their personal demand.

So scalpers are good. They have performed the critical function of providing the NES Classic to the diehard fans who want them most, and we can say that pretty definitively, as one’s personal price point is determined almost entirely by one’s own demand. It follows that people willing to pay $110 obviously want one more than someone who is only willing to pay $60 for one. This means objectively and measurably that the scalpers have ensured that people who wanted the NES Classic most were able to acquire one.

But, again, all the scalpers have done is ensure that people who are bigger fans of Nintendo and NES games were able to acquire an NES Classic, while people who weren’t as big fans and didn’t want one as badly as those other people weren’t able to, because they weren’t willing to fork over that much cash for one. I can’t even pretend to think it’s a bad thing that people who are bigger fans of Nintendo are able to purchase a Nintendo product that they want, as opposed to people who aren’t as big of fans being able to acquire the product. Clearly, it doesn’t matter as much to them, and the role of currency is precisely to allow us to measure value. That’s literally what currency does. The USD is a unit of measurement for value, and we use it to gauge how much a person wants something. If Person A wants a thing more than Person B, then Person A will be willing to pay more. If Person B can’t get it because he’s not willing to pay as much as, or more, than Person A, then the good should go to Person A, because Person A measurably wants it more.

I try not to tweet much at Jim Sterling, but I think I’m going to tweet this one at him, because he’s been pretty hard on scalpers in the past, and I don’t think that’s fair. Looked at economically, all they do is separate the Diehard Fans from the Casual Fans and ensure that the Diehard Fans are able to acquire the things that they are Diehard Fans of. I agree that this sucks for the Casual Fans, but that’s a problem of Supply, not the scalpers. It’s Nintendo’s fault that someone went without an NES Classic. The scalpers only ensured that it was the Casual Fans who went without, and that the Diehard fans didn’t have to.

I think that’s a good thing. I think that if Person A is a bigger fan of This Thing than Person B and is willing to pay more for it than Person B, then Person A should be the one who gets it.

And I would certainly argue, now that Nintendo has ceased producing them and the next batch will be the last, that it is more critical than ever that we ensure that the diehard fans have them. I bought tickets to the A Perfect Circle concert next month for well over what they cost initially, and the reason was precisely because my demand exceeds other people’s. I can’t even convey with words what A Perfect Circle’s music means to me. Being able to see them again–probably for the last tour they’re ever going to do, since no one expected this one and it’s been 14 years since their last one–is one of those experiences that literally makes life worth living (no exaggeration). Because of scalpers, I was able to acquire a ticket, and I would say it’s far more important that I was able to get a ticket than Random Joe who kinda likes their music and has nothing else to do that evening. The seats aren’t even that good, and I don’t even care. It’s A Perfect Circle. It means more to me than it will anyone else in that audience. This song probably conveys it best:

While that’s a matter that’s a bit more serious than a random video game console that can be replicated in countless other ways, the fact remains that scalpers performed the same service there that they’re providing for Diehard Nintendo and NES fans, and… that’s a good thing. It does suck to be on the “I can’t have one” end of that, and I’ve been on that end plenty of times. Until about 3 weeks ago, I was on that end, and didn’t think I was going to be able to make it to see APC in Nashville (The fact that I don’t care even a little about the 3 hour drive says a bit, too). It was genuinely heartbreaking. Thanks to scalpers, I can go. Thanks to scalpers, people who really want an NES Classic can get one.

Nintendo should make more. There’s no doubt of that. And A Perfect Circle should do more tours. But until supply is high enough that everyone can purchase the good at the price point they prefer, there will be people who go without, and scalpers ensure that the “people who go without” are the ones who don’t care as much as other people.

* Actually, I don’t think I’d even pay that. To be completely honest, I don’t think I’d want one if it was free.

I’d also agree that the scalpers have gone way overboard. $400? $500? I even saw one for $8,000. That’s alright, though. I sincerely doubt anyone is going to pay that much, and they’ll lower the price to something less stupid. That’s greed and stupidity more than anything else. But yeah, still, if someone is willing to pay $500 for one of those pieces of crap, then they want it way freaking more than most people and should get it. I just don’t think there is anyone out there willing to pay even half of that. For fuck’s sake, all of the games are available free online…

Let’s Have A [Trade] War

Recently, a Chinese official warned that they don’t want a Trade War but, if there is one, then the United States would lose. I think this shows a lot of confusion about what is meant by “trade war,” because there isn’t a winner or loser in a trade war. Well, at least not in the sense that the Chinese government can win a trade war and the American corporations can lose one. In fact, the winners of a trade war are consumers, and the losers are producers. A trade war would be a good thing for the American People.

People talk about a possible trade war, and I get excited–fuck. Yes. Bring it on, please. There’s not a better way to save our economy than a trade war. As long as it doesn’t escalate into an actual war, there is absolutely nothing to fear from a trade war–in fact, they happen all the time, and they’re to be desired, because competition is the key element that drives down the cost of production by encouraging companies and nations to increase efficiency, cut waste, and lower prices.

But let’s get to a real example to explain what I mean.

Consider the Foxconn hardware, which has its various devices used in all sorts of consumer items from iPhones to Acer laptops. There are also Foxconn network cards–though they’re increasingly uncommon, and I think Realtek usurped them and Foxconn became just the chip manufacturer… It’s complicated and not really important to the point at hand–so consumers in the United States can buy Foxconn directly.

In real terms, a trade war with China would mean that they intentionally drove down the price of Foxconn hardware in order to drive American manufacturers of out of business. It’s similar to how Wal-Mart has a history of lowering prices to drive other companies out of business. It’s the same principle here: take a loss now to annihilate the competition, and then enjoy a monopoly.

But oops! We’ve already seen the problem, haven’t we? Indeed, there is no American manufacturer that competes with Foxconn. America doesn’t make network cards, are you kidding me? We may nor may not have research teams that devise new chipsets that are leased to other companies, like NVidia does, but I don’t think we even have that. So the grand effect from China driving down the cost of the devices manufactured by Foxconn would simply be to lower Apple’s and Acer’s costs in producing new iPhones and laptops. If it costs less money for Apple and Acer to make laptops, then that benefits consumers, even if it’s not at a 1:1 ratio. I mean, if Apple saves 3%, we wouldn’t see a 3% drop in iPhone prices, but we would see some drop–possibly 0.5% or even 1%.

We know this to be true, because it was only about a month ago that I finally replaced the television that broke down last year. The one that broke down last year was an off-brand I’d purchased from RadioShack for $200. It was a 27 inch television that didn’t handle 1920×1080 especially well, though it did do it. I replaced it with a 32 inch Sanyo television that cost $128 after taxes. Regrettably, the universe conspired to throw that television from my wall, where its screen smashed rather unceremoniously on my hardwood floor, but I can still buy another 32 inch Sanyo–not imminently, though in a few months, when things have calmed down–and will effectively have bought two larger televisions for a price only slightly higher than what I paid for one smaller television a number of years ago.

We lose sight of how much progress we have made in the United States, and how high our standard of living is, because we enjoy all the luxuries of modern society. Fifteen years ago, a 70 inch television would have been unheard of, and would have been either an imaginary item or a pipe dream for the majority of Americans. Today, you can get one for about $1,000. I remember one Black Friday sale around 2004 that Wal-Mart put 27 inch televisions on sale for under $100. But they weren’t flat screens, lol. They were enormous, about the size of a mini-fridge, and maybe had a single composite and coax input. Fast forward to last year, and Black Friday saw sales of 27 inch flatscreens capable of 1080p with 3 HDMI inputs, 2 composite inputs, 1 component input, 1 USB input, and 1 VGA input for the same price.

This is the hidden progress that Americans generally haven’t noticed. We complain about the American poor not making any progress, completely glossing over the fact that in less than 2 decades the American poor went from buying the gigantic CRT-type televisions while only the wealthy could afford LCD screens to having multiple LCD screen televisions, most of them ranging from “very large” to “uselessly large.”

Do you remember when a “big screen tv” meant this gigantic thing that took up an entire living room wall and was two feet deep? Do you remember when that “big screen tv” was a big deal, when it was a point of pride to own one? Again, just compare that to today, when it’s a rarity for someone to not have a widescreen, LCD television pushing at least 720p. The cost of televisions has steadily gone down over the decades, as a result of competition and things like the Foxconn example I gave above. It probably wouldn’t be instant, but the price of phones and laptops would steadily lower as the savings get passed onto consumers, who don’t stop to realize that they’re buying the iPhone 7S today for the same price that they’d have bought the iPhone 6S only a year before, only now the 7S is the latest and greatest and the 6S is a model or two behind. We haven’t stopped to notice that we’re routinely buying and discarding televisions that would have cost three children, half an arm, and one testicle twenty years ago for a half of week of minimum wage labor today.

The other direction that China could go is to increase prices. This also only benefits the United States. It’s a simple matter of supply and demand, and the relationship between them setting the price. Just as selling something for less than it’s actually worth will create a shortage of that item, so will selling something for more than it’s worth create a surplus of that item. One hundred people may be willing to license a Foxconn chipset for $0.50, but if only fifty people are willing to license the chipset for $0.75, then Foxconn has lost money, and that’s how economics works, and why economics always uses curves.

Demand and supply lines are only straight in simplistic economic exercises. In the real world, things never work that way. If I can make one hundred televisions for $50 each, that doesn’t mean I can double production and make two hundred televisions for $50 each. Average laws tell us that I would expect doubling the production to increase costs to about $60 per television. It works in terms of selling things, too, and is the reason that everyone in the world is used to things being cheaper when bought in bulk. One roll of toilet paper may be sold for fifty cents, but four rolls of toilet paper will be sold for $1.50, not $2. This is mathematically a curve, of course, because it’s obviously not a linear progression.

It’s obvious when we stop to think about it, and it’s the reason that a trade war–artificial changing of prices–benefits consumers and ultimately hurts producers. The consumer benefits from buying 4 rolls of toilet paper for $1.50 instead of buying four individual rolls for fifty cents apiece. The consumer has benefit from all the technological innovations and pricing wars over the last twenty years, and now a widescreen, flatscreen LCD television is as much a staple in American homes as the microwave. Oh, there’s another, of course. Microwave ovens were once the property of the rich and wealthy. Today, they’re so cheap and abundant that entire YouTube channels exist of people microwaving random things in order to destroy them. Ditto for refrigerators, washing machines, driers, hair blow driers, and just about any-damn-thing else you can think of.

It wouldn’t be all sunshine and daisies if China foolishly took this route, but it would, in the longrun, help the United States. There is a demand for Foxconn devices, after all. If I can produce bananas so cheaply that I can sell them at a cost that no one can compete with, then the bar of entry is so high that new companies won’t be able to enter the banana production industry. They won’t have the resources or knowledge necessary to compete with me, the very same reason that we see companies like Microsoft dominating industries with inferior products and shady business practices. There’s really nothing that can be done about this except wait until their monopoly destroys itself, because monopolies are self-destructing in the market.

As a monopoly dominates, it grows larger. This increases waste, inefficiency, and loss, not just because production costs and profits don’t scale linearly, but also because competition is the driving force that minimizes waste, inefficiency, and loss. Without someone to compete with in the OS market, Microsoft can release one terrible Operating System after the other, and practically force an “upgrade” onto everyone, while also losing money and absorbing losses due to bad ideas, waste, and inefficiency. They continue to grow, of course, because they’re the only option, and this only generates more waste, inefficiency, and bad ideas. With more and more money being lost to these things, Microsoft has to raise prices to continue making money, so Microsoft Office 2016 goes from $199 to $249. At first, this is bad for consumers, but it also means that a new company making an Office competitor has an extra bit of padding they can work with to improve their software. Maybe they couldn’t afford to implement this feature, because it would have increased the price of their software from $180 to $210, and selling their software for $210 would have made it more expensive than Office. Office, being the champion already and being cheaper, would win that contest. But if Microsoft has to mitigate its increased waste and inefficiency by increasing prices to $249, then the new competitor can implement that feature and still be cheaper than Microsoft Office.

Maybe the company American Network Chip Manufacturers would like to make its own chips, but can’t afford to because Foxconn’s chips are so much cheaper. Foxconn raising the cost of its chips just might mean that ANCM can finally afford to hire American manufacturers and still produce a chip that is cheaper than Foxconn’s. Oh, no, what a disaster! Hiring Americans and creating American manufacturing jobs?! Woe is me, how awful!

Although such a thing would still result in higher prices for consumers, which is the problem with protectionism and tariffs. If we put a 20% tariff on Mexican bananas and Jose starts selling his previous $1 ea bananas for $1.20 to cover the tariff, then obviously it’s the people buying bananas who are paying for the tariff, not Jose. But it’s a bit of a double-edged sword, because it also means that American Banana Producer can now charge up to $1.19 per banana and still beat out Jose in the market. Maybe American Banana Producer was about to go out of business because its banana costs can’t be lowered beyond $1.10. This is bad for consumers, who now pay ten cents more to buy an American banana picked by an American worker, but it also means there is now another American manufacturer with a job. And though banana farming isn’t the most lucrative industry, I would guess, industrial manufacturing jobs generally are.

It’s true that we’ve become a society of service people. Very, very little is manufactured in the United States, and that is a problem in the grand scheme of things. The only reason it works now is because much of the world hasn’t noticed that we’re giving them sheets of paper in exchange for actual goods they manufacture, but that gravy train is inevitably going to crash. I make a living fixing, installing, and configuring computers and networks, almost none of the components of which are manufactured in the United States. What happens to my job, when the USD collapses and China, Japan, and South Korea stop accepting the USD as payment? I’ll have nothing to service if Americans can’t buy the things I service. The very existence of our service-centric economy–from auto mechanics to gas station employees to I.T. people to fast food workers–is dependent upon the USD and the willingness of manufacturers to accept it. The moment–and I mean the very moment–that they stop, the United States will enter a depression that makes the Great Depression look like Disneyland. And that’s not hyperbole; the entire American economy will collapse, virtually overnight. The only reason it persists today is that we’ve managed to keep the world using a dollar standard–often by invading nations who want to stop accepting it. That can’t last forever.

Even so, the way out of that is obvious. It would take a while and would be tremendously unpleasant, but the solution would be to re-open all the American factories that have since been exported to China, Indonesia, Japan, and South Korea. A trade war with China would allow this to happen slowly, as opposed to all at once with the collapse of the USD, but it’s inevitable. The chips will fall eventually, and the gravy train will be derailed. We can count on it with as close to absolute certainty as a person can get. Having it happen slowly and over a years-long trade war with China would drastically reduce the hardship, starvation, and interim poverty. Having it happen suddenly at some unknown point in the future will result in widespread starvation. And that’s just a fucking fact.

So yeah. Bring on the trade war. Let’s do it. Let’s get it over with. The longer we kick the can down the road, the more devastating it’s going to be when it finally happens–like the requests to raise the Minimum Wage that are the most blatant examples of kicking the can down the road that we can look to. The Minimum Wage is a Price Floor on the price of labor, of course, and is only “necessary” because the market price of some labor is lower than the Minimum Wage. There’s a disparity between what a job is worth to an employer and what an employer has to pay, so any non-critical task results in a fired employee, because the employer isn’t going to pay someone $7.25 an hour to clean windows when the market price of a window cleaner is $2.50 an hour. So increasing the Minimum Wage just causes a greater overlap between “non-critical tasks” and “not worth it to pay someone to do,” the result of which is unemployment.

Economic law tells us that reckoning is going to happen sooner or later. The market will come to equilibrium one way or another, and it won’t be pretty when it happens. We should be reducing the Minimum Wage–or abolishing it altogether, I’d prefer–incrementally until such time as we can abolish it, not increasing it. Making the disparity greater is the dumbest thing we could do. Let’s get it over with. Let’s crash the train.

Let’s have a war.

As long as force, violence, and coercion are forbidden and it remains a market matter solved by non-violent competition, of course.