Contrary to what is commonly believed, you do not “own” your money. Money is a government created and regulated commodity. While it is illegal for you to print your own currency, everyday people create “money,” when they create profit. The government recognizes the difference between currency and profit, and it taxes your profits rather than arresting you. You do not need to be in a business to generate a profit. When a laborer works for somebody else, his labor generates a profit called “income.” Different terms have been created to describe profit, based on how it is created. All money originates from profit, and the government constantly regulates it.

It is important to recognize that the government and the people both behave similarly in regard to the creation and regulation of money. Even when the government spends money it does not have, it is not behaving differently than individuals who regularly go into debt to purchase homes, automobiles, etc. Every organization has the same infrastructure needs as the individual. Personal finance, business overhead and government regulations are intimately linked.

The government is like a balloon. Any pressure at one point will divert the pressure to another point. The government passes laws to regulate the economy, with the hopeful desire that everyone and every organization will thrive, but most laws are primarily written to adjust the effect of previous laws. The government is in a perpetual state of crisis management, trying to regulate the currency that it created.

Democracy gives everyone an opportunity to petition the government for relief of burdens created by the currency, but it is important to note that the currency system under democracy is the same as it has been for thousands of years. The American Revolution was part of a wave of political change, but the underlying economic philosophy was unchanged. New faces adorned the money, but money remained a government created and regulated commodity. Communist and Islamic revolutions made similar political changes regarding who and how decisions would be made, but the underlying concept of money also remained unchanged.

There are two powerful abstract ideas at work in the world. One is the belief in the existence of God, the other is the belief in the existence of money. Almost everyone believes in the existence of money and that they “own” it, but money is just a form of barter. Money has no value unless other people accept it. Money is an intellectual agreement. It is real because we believe it exists.

The purpose of money is to serve as barter. Trade is necessary for everyone to survive. Money allegedly makes the distribution of goods and services easier. If the distribution of goods and services is difficult or unfair, then we should see that as a symptom of a mis-regulated currency. While the political process can give everyone a chance to vent their grievances, the more difficult issue is what has caused the problems. Problems are easily observed; they present themselves. Solutions, however, require a certain amount of dilligence. Treating the symptoms will never lead to a cure for the underlying disease. That is why it is important to recognize that we do not “own” money.

At its simplest form, the economy is a distribution system. We work to produce what others consume, others work to consume what we produce. While everything originates from the Earth for free, man must add his labor to fashion the natural resources into something useful. Distribution within the economy should not be measured primarily by money or production, but in terms of labor.

Because the Earth is large, certain resources are found are various places. Trade is in everyone’s best interest, but what we are trading primarily is labor, not goods. Governments exist to facilitate trade both within and outside of a country. Money was created to make the trade easier. If trade is not working well, people tend to both blame the government and look to the government for relief, but what we really need to know is how does the economy work. We cannot fix a system without properly understanding how it works.

The primary failures of a mis-regulated economy are war and poverty. When the labor of one nation is spent on destroying the productivity of another nation, this should be seen as a catastrophic failure of trade. Sanctions precede war because a trade war is an act of war with money as the weapons. Both sides in a conflict believe in money and war and that God favors themselves.

Likewise, poverty should be seen as a failure to regulate labor within a country wisely. As we know, poverty and war have been a part of every nation’s history. Money has always been mis-regulated and misunderstood, and therefore the history of men is about the use, misuse and abuse of labor and money. History is a crime scene where everyone is a victim, not just for slaves, but for the slave-masters, too.

The mis-regulation of the currency makes everyone miserable, high and low. The rich live in fear, the poor live in poverty. The same forces that make men rich also conspire to make them poor. Fortunes that can be made overnight can fade just as quickly. The cycles of boom and bust are not random events, they have an underlying mathematical formula.

I was thinking today that the primary contradiction between freedom
and government revolves around the concept of a contract.

A contract is something that is freely agreed upon by two parties.
No government need be involved. But if someone feels that the
contract has been broken, then he goes running to the government.
Pretty quickly, the government is spending all its time enforcing
contracts that private citizens agreed to.

The original agreement between the two citizens had an element of
risk involved, for both sides. They have to trust each other, and
the vast majority of contracts work on a gentlemen's agreement.
But, once a dispute arises, all the risk is transferred to the
government to decide, and thus all the people bear the weight of
honoring that contract, even though they were not a party to the
agreement. It would be far better for the government to refuse to
judge any contract, than for it to be judge of all of them.

Of course, many would complain that they want the "protection" of the
government, but it is that very act of transferring risk and creating
a government "of protection" that has destroyed our freedom and
create Big Brother. Taxes become a reflection of the costs of all
contracts, since even the government is "under contract" to its own
employees. And, most businesses are selling to the government,
either directly or indirectly.

Libertarian is more than just a political idea, it is also the idea
of economic liberty. For there to be liberty, there must also be
risk. Most Libertarians, I suspect, want the rule of law (ie, the
force of law) on their side. (They tend to be self-employed.) If
they are willing to pay for that "service," then they need to admit
to themselves that the rest of the apparatus must come along with it.

If the courts limited themselves to criminal cases of violence, then
we would be far better off. Nothing can be stolen twice, but by
getting the government involved, the loss can be many times greater.
Insurance is a state-regulated pyramid scheme, and making the
government the enforcer of contracts turns the government into a
taxing pyramid scheme. (Of course, no insurance should be
mandatory. That is forcing people into a contract.)

More people are swindled because they think the government is
regulating the contract. People would be wiser with less government,
but there would also be less need to commit fraud. Even in the act
of trying to protect people the government is destroying the value of
the currency, because all contracts revolve around "the right to
profit." Since capitalism, by definition, is an imbalanced trade,
where one person loses and another person gains, the right to profit
is inherently at risk when entering into the contract. The
government is now insuring people's expectations; this need not
involve the state.

Take copyright protection, for example. If I buy a CD I am under
contract to the artist and the record company. It's totally nuts how
far this concept of contract has grown. While people are no longer
considered property (slavery,) the concept of private contracts is
still seriously out of whack, along with the government's role in
enforcing them. Liberals, Libertarians and Conservatives all go
running to the government for protection of their contracts, when the
better strategy would be to limit the government's power to decide
certain issues, and all contracts would be strictly voluntary. (How
many soldiers would be in Iraq now if their heads were not full of
the foolishness that they are "under contract?")

We are all making ourselves a victim of our own government, but more
specifically, it is our understanding of contract that is at fault.
Even the covenant with God is voluntary, He may judge at the end,
but in the meantime you can keep or break the contract at will. Why
would contracts between man be less flexible? The more we enforce
our expectations, the less they come to be. Without trust, we have
nothing. The government becomes an instrument of revenge, and
nothing will correct the past, but the attempt to "right wrongs" can
destroy the present and the future.

peace,
steve consilvio
www.behappyandfree.com