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by Russell D. Longcore
A Nation Without Capitalism
This article is a follow-up to my most recent article about The Free Republic of North America, known affectionately as FRONA.
I have created a new nation with some pretty radical new ideas on governance. But today I want to put some meat on those bones and show you how truly radical FRONA is.
Living in FRONA will require EVERYBODY to think differently about government, and then LIVE differently.
Let’s start out with a premise: EVERYBODY acts in their own self-interest. NEARLY EVERYBODY wants to gain some advantage so their self-interest is advanced. And the people who live in FRONA will be no different. By creating FRONA in an entirely new way, the people who live in FRONA ALL have many advantages over the remainder of the people of the earth.
But the subtitle should have caught your attention. A Nation Without Capitalism? I want you to consider the difference between the FREE MARKET and Capitalism. This is more than a semantical exercise, or a side argument about how to define a word. “Capitalism” has been defined as ” an economic system that is based on private ownership of capital goods and the means of production” (Wikipedia). A simple way to define it would be “people lending their savings to other people.” But for the last 150+ years, Capitalism has actually been Mercantilism, because it is expansionist, imperialist, monopolistic, subsidizes various things, uses regressive taxes against things it doesn’t want, wholly embraces the fiat money system and Fractional Reserve Banking, inflates the currency to pay for its shenanigans, foments wars and the bankers put nations in debt. So there’s the “Capitalism” that our societal memory THINKS is a good economic system, and then there is the REALITY of what Capitalism has morphed into over time.
Capitalism is not a dictionary definition. Capitalism is the economic system AS IT IS PRESENTLY OPERATED TODAY. The political players from far left to far right argue about Capitalism. All the present world players simply want their turn running the show. But NO ONE suggests that the present system is so hopelessly broken that it cannot be fixed. NO ONE will say that Capitalism is a failed system and should be thrown on the dungheap of history. That is…no one but ME.
I contend that the FREE MARKET is the answer to the present world’s economic system. And FRONA is the FREE MARKET.
FRONA is a revolution, not just a new nation. FRONA will be all about individual liberty and property rights. One of the greatest challenges we face is that no one in the USA in the last 150 years has actually EXPERIENCED individual liberty and true property rights. So the FRONA way may take some getting used to.
FRONA will reinvent the society from top to bottom. And the first and most important reinvention will be FRONA MONEY. Because no living human being has lived under a 100% precious metals monetary system, we have no life experience with which to compare it. And because FRONA money touches every aspect of human existence, it will be the single most disruptive force in the world.
Using FRONA money is not to be compared with just using another country’s money. This isn’t like using Brazilian reals or Chinese renminbi or the Euro instead of US Dollars. That experience is simply trading one paper currency for another. FRONA money is all about its WEIGHT and PURITY, not an arbitrary value stamped on a coin or printed on a currency note. FRONA money IS…money. The rest of the world has currencies based on nothing.
“Hard money” is also a monopoly destroyer. In the rest of the world, governments control the money supply and the value of currencies is entirely in the purview of those governments through their manipulation of the currency. Governments can flood the market with their currencies and cause inflation, or they can withdraw their currencies and shrink the money supply. The government monopoly of money also controls credit through a government-approved banking cartel. In FRONA, the MARKET decides the money supply, and the money supply will reach an equilibrium all on its own. The FRONA government cannot create and control money because it has no central bank. The Treasury can mint coins if it wishes, but has no advantage in the marketplace. FRONA money destroys the government money monopoly.
FRONA Ends Taxation Tyranny
Think about all the taxes you pay. Income, payroll, excise, sales, property and many others…you pay them all, directly or indirectly. In FRONA, there is only one form of taxation…the national 10% sales tax. Everybody pays it, from prince to pauper. There are exempt transactions just like in the state where you live, like transactions between individuals. No other governmental body or authority under the auspices of FRONA may lay a tax on anyone. And this carries over into the ways that special interests lobby Washington for special favors and protectionism through tax loopholes. ALL of the tax deductions, tax benefits, tax loopholes, tax exemptions are GONE in FRONA. There isn’t even a charitable deduction any more, nor is there any reason to have non-profit corporations like churches and charities. No tax code. No property taxes. When there is no special goodies to buy through bribes…sorry…campaign contributions, all those lobbyists will be unemployed in FRONA.
FRONA Destroys The Banking Monopoly
This leads us to look at banking. In FRONA, the Charter defines what a “bank” is. Then the Charter has a clause that requires ALL banks to maintain a 100% reserve requirement on deposits. That functionally declares Fractional Reserve banking to be illegal. Lenders are only permitted to lend their own money, and may no longer create money from thin air. The FRONA Charter busts the Banking monopoly by removing their stranglehold on credit to an elite group of mega-corporations. No longer does a government-approved banking cartel enjoy protected profits and the ability to stifle competition of alternative banking and credit sources. In fact, in FRONA, anybody who met the Charter requirements as a bank could open for business. In FRONA, an individual could operate a bank from his house, his apartment, a strip mall storefront, or the downtown hi-rise…or even online. FRONA kicks the door wide open for competition in banking, which will drive down prices for all banking fees at the same time it drives up interest rates for savers. And borrowers will enjoy market-determined interest rates and readily-available credit to creditworthy borrowers.
FRONA Cancels The Insurance Monopoly
How about another money-related monopoly, the Insurance industry? This author has been involved in the insurance industry now for 40 years. I am not an actuary, nor am I an underwriter. I am a claims guy. I have seen the insurance business from the inside for a long time. Insurance companies are partners with government at both the state and Federal level. It is an incestuous, corrupt relationship in that the insurance industry is regulated by government, and the Insurance companies buy billions of dollars in Treasury bonds and state bonds to add to their investment portfolios. Insurance companies now hold a position of power in that they could cause a collapse of the bond market if they decided to sell off Treasuries or state bonds all at once. So state and Federal insurance regulations are basically what the insurance companies agree to accept. American insurers presently enjoy some of the privileges and profits that the bankers enjoy. In FRONA, no more rigged markets like for Car, Flood or Health Insurance. No national Health insurance or a Medicare-like program. Insurance companies would have open underwriting, which means they can insure or not insure whomever they like. In a truly free market, adverse risks in all areas of life would find insurance, just at a higher price. The FRONA government would also not require car insurance for drivers, which distorts the car insurance market and nearly guarantees profits for insurers. And the FRONA Department of Insurance does not license insurance companies to do business inside the nation, but through law enforcement, prosecutes insurance fraud aggressively. This lack of licensure also opens the door for more insurance competition and other solutions like mutual aid societies.
FRONA Destroys The Business Monopoly
Business licensure of all kinds is mostly about governmental bodies extorting revenue from business for the privilege of doing business in that governmental jurisdiction. But licensure also serves the purpose of stifling competition for the established businesses. In FRONA there are no business licenses. Anybody who chooses to can go into business without a license. More businesses will mean more competition, more innovation and lower prices for everyone.
FRONA Busts The Land Monopoly
The FRONA Charter will require that any real property that the government needs will be rented from private property owners. FRONA will not own ANY real property. That means that the Eminent Domain confiscation of real property ceases in FRONA. There are also no building codes in FRONA as well as no zoning codes. The FRONA government will not build and own infrastructure, which means that private individuals will own roads, bridges, rail lines and such. The users will pay for their use and upkeep. Government land use and restrictions artificially inflate the property values. No more in FRONA.
FRONA Destroys The Protectionist Monopoly
Tariffs and Duties have been in play since the founding of the USA. Contrary to Northern history textbooks, the US “Civil War” was started over tariffs. A tariff is a tax assessed on a product coming into the country from across the border. The tariff is meant to favor domestically-produced products over foreign products. But what it does is force the consumers to pay higher prices for any goods to which a tariff is laid. That drives up consumer costs of living to benefit a select few business that enjoy the protection from foreign competition. In FRONA, there are no tariffs, so there is no upward pressure on your cost of living. This also requires businesses to either compete in the marketplace or die. Survival of the fittest.
FRONA Arrests The Security Monopoly
Consider how so-called “security” in the USA has exploded recently. The Department of Homeland Security controls the movement of people through airports, bus and train stations, and is even having influence on fans going to professional sports games and rock concerts. Americans are now grudgingly willing to walk through metal detection devices and even X-ray machines at all kinds of venues. The police forces at local, county, city and state levels are paramilitary forces these days, preying upon the citizenry while they tell us they “protect and serve.” America has millions of its people employed in the standing military forces of Army, Navy, Air Force, Marines and Coast Guard. Other millions languish behind bars, the USA having the largest prison population in the world. That means millions of jailers. Now think of all the private companies that exist to serve the security parasites among us…companies that make the scanners and x-ray machines, the military/police hardware, the armored vehicles, the uniforms and bullets.Think about the builders of all those security buildings. And we have not even talked about the intelligence community and all the money it requires to have multiple organizations like the USA does. Then, consider even further the companies like Blackwater/Xi that employ untold thousands of mercenaries that rely on taxpayer dollars for their existence.
FRONA has a militia. FRONA has no Homeland Security. FRONA doesn’t need mercenaries. That’s a pretty obvious way that things will be different in The Free Republic Of North America. But some of the changes will be more subtle. In FRONA, there is not a multi-volume set of laws that police must enforce. And in a nation, the redundancy of all these police agencies is unnecessary. So I see the possibility that at least 50% of the people presently employed in Law Enforcement will be fired. Further, at secession, any existing union contracts between government workers and governments are cancelled. So, there would likely not be further union involvement in law enforcement.
FRONA Destroys The Regulatory Monopoly
Compliance with all of the governmental red tape and crushing regulations add cost to all goods and services. All that regulation also acts as a barrier for new business to start, increasing the amount of capital they must secure to compete. FRONA starts with a clean slate. All prices for goods and services in FRONA will be lower because of the lack of government regulations. Now, also consider all of the people employed to help individuals and businesses comply with regulations that will not be required in FRONA. Bureaucrats, inspectors, accountants, tax preparers, attorneys and their staffs…not needed in FRONA.
FRONA Cancels Out The Communications Monopoly
Washington regulates the airwaves and Internet bandwidth, among other things. Licensure is everything. Once again, it restricts competition and drives up prices. FRONA has none of that. You want a pirate radio station in your bedroom? Go ahead.
FRONA Plows Under The Agribusiness Monopoly
Think about all the agricultural products that government subsidizes…corn for ethanol, dairy products, cotton, wheat, rice, soy, peanuts and the list goes on and on. You pay higher prices for ALL those goods since the market price is distorted by the subsidies. No subsidies in FRONA means lower prices for all those goods. And remember, no tariffs in FRONA. And no payments to farmers to NOT grow crops either.
Start to consider all of the human effort that will NOT be required in The Free Republic Of North America. No tax preparation, no standing in lines to get licenses, no search of you and our luggage at the airports, no quarterly tax returns for businesses, no filing government forms, no political parties, no bi-annual elections, no politicians doing fund-raising, no lobbying the government for special favors, no standing military, no invading other nations. Let your imagination be your guide. Do you need a visual example? For Capitalism, imagine your favorite mall. One giant building, a few anchor stores, then dozens of stores all lined up in pretty rows. The mall owners control all the tenants. Outside are the hundreds of little parking spaces where you can park when you shop. The big earners are the mall owners, then come the merchants. Then come the managers and the store employees. The whole system is proper, buttoned-down and regimented.
Think of the Free Market as a bazaar. Untidy, disorganized, spread out in every direction, no licenses, a wild variety of products and services. Negotiations, wheeling and dealing, buying, selling…all happening at once with no direction from above.
The Free Republic Of North America will be the free-est place on earth. Don’t YOU want to live there? Can you handle that much freedom?
Secession is the only solution for individual liberty and property rights on the North American continent.
DumpDC. Six Letters That Will Change History.
(Editor’s Note: This article was inspired by the book “Markets Not Capitalism,” by Gary Chartier and Charles W. Johnson)
Copyright 2013 Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.