The message from the people behind the Sopranos show seems clear: In a “stateless” Robert Nozick type of society, where everything should be arranged by individual, freely entered contracts, markets will deteriorate into organized crime.

I’m intrigued by the idea of a free society based on voluntary actions espoused by some libertarians. I like the idea.

Firstly, it must be pointed out that this organised crime isn’t happening in a stateless society – it’s happening in one with the “protection” of the state acting as “third-party enforcer”.

Secondly, in a stateless society, Tony may find himself in competition with legitimate companies since drugs would not be illegal.

Of course, the Tony Sopranos of the world will exist despite what kind of political system you have in place. Libertarians would argue though, that if you put ultimate enforcer power into a single institution (the state), then many of the Tony Sopranos will find themselves attracted to that line of work . No society should tolerate mafia-style violence whether that violence is perpetrated by depraved individuals in a mafia-style gang or – indeed – by the state itself. Murray Rothbard wrote:

the State is nothing more nor less than a bandit gang writ large

The main distinction about a “stateless” society, sometimes overlooked or at least not singled out, is not the absence of a state, government or politics. Instead, it’s the absence of a coercive state: legitimised violence and force (i.e. threat of violence). The reason this happens is because the state (or government) is always considered coercive by most writers. The idea is that society should organise not around coercion but around cooperation – voluntary exchanges and actions.

For instance if some subset of society wanted to bail out GM, then they could do so via their voluntary contributions to such a cause.

I do still have a concern that a free and voluntary society could see the rise of a plutocracy. I’m consoled by the fact that that’s pretty much what we have at the moment via corporatism or crony capitalism! In a free society, at least you can choose not to deal with the individuals and companies that you feel are part of the plutocracy (sometimes called “voting with your” feet or wallet). In our coercive representative democratic society you have no option, no “out” – except perhaps if you have a majority – or a friend in parliament . I should write more about the problems of representative democracy another time – particularly the usual two party, left-right political system that is so common.

Australia’s residential rental crisis appears to be easing with new data suggesting vacancy rates have been rising throughout 2008 for Australia’s Cities.

Australia’s nationwide city rental vacancy rate stood at 3.3% in December 2008, which is up from 2.1% recorded in December 2007. Melbourne has recorded the highest vacancy rate at 3.9% while Hobart recorded the tightest rental market, with a vacancy rate of just 1.1%.

Rental vacancies appear to be the tightest in the nation’s affordable suburbs. However, in the middle to upper end of the market place there is an increasing oversupply situation with a number of inner and top end suburbs recording vacancies above five per cent and in some cases, above 10 percent. This is particularly the case in Sydney where suburbs such as Vaucluse (11.4%) are now oversupplied.

SQM’s vacancy rates are based on monitored online rental listings, adjusted for false listings and properties that have been withdrawn from the market within the monitored period concerned. The available rental properties are then divided into the total number of established properties available for rent as provided by the Australian Bureau of Statistics.

The vacancy rates and full methodology are available for free on www.sqmresearch.com.au. The data is also freely available down to a regional and postcode level with a monthly back series to 2005.

According to Louis Christopher, SQM Research founder and Head of property with ratings house Adviser Edge:
“Notwithstanding a seasonal dip from November, vacancy rates for most postcodes around the country have been rising throughout 2008. We believe this phenomenon, which is most notable in inner urban and affluent areas, has been as a result of more and more vendors entering their properties into the rental market after failing to sell their properties.

It is also to do with the fact that rental demand has been flat to falling, particularly in the affluent postcodes where upper end rental accommodation is perceived to be a discretionary expense that can be cut back during lean times.
“This combined with the re-launch of the First Home Owner’s Grant, will mean that vacancy rates are likely to keep rising in 2009. And so, we believe that rents are likely to now flatten going forward for most cities, notwithstanding remaining pressure on the lower, affordable sections of the rental market.”

Some highlights from the video:

• “Lower tax rates and a reduction in the burden of government are the best ways to boost growth”
• “I don’t think it’s going to stimulate anything. The problem with our economy is not that we are not borrowing and spending enough and we need the government to do that for us.”
• “…more spending and borrowing is not going to solve it”
• “Government just doesn’t work very well…”
• “More government spending by Hoover and Roosevelt did not bring the economy out of the depression in the 1930s.”
• “The new deal failed. It prolonged the depression. It deepened the depression.”
• “The thing to do now is to reduce taxes and reduce of government.”
• “This is just basically wasting money.”

So far, Kevin Rudd, Wayne Swan and the rest of the Federal Government have wasted in excess of $50 billion of public money on direct fiscal stimulus “packages”. That’s your money! It’s our money! In fact, it’s not even money that has already been collected – it’s your future income. It’s your children’s money. It’s your grandchildren’s money. Wake up Australia!

Read more about fiscal reality at Cato.

I wonder how many times Ben utters the word “stabilisation”? Let me know if you count them!

Some highlights:

• Ben is certainly printing money to “capitalise” the banks. They don’t say how much except that the Fed has doubled it’s balance sheet.
• “It’s not tax money” Ben says as if that makes it ok, “The banks have accounts with the Fed… so to lend to a bank we simply use the computer to mark up the account they have with the Fed. It’s much more akin to printing money than to borrowing.”. However, if the banks have been lent the “new money”, how can that possibly recapitalise them?
• Ben trys to appear as a regular middle-class person, growing up in a small town and working himself through university. His grandfather owned a store on “Main St”.
• His greatest fear is that there is not enough political will to complete his “stabilisation” of the economy, banks and markets. He appears to be giving himself a psychological out if the American public finally say “Enough!”.

Would Obama have to be concerned now about large bonuses being given out from the UK arm of AIG if they’d simply let AIG go bankcrupt in the first place? Those employment contracts would be worthless now if it wasn’t for the Fed.

This reminds me of the “Stabilization is Chaos” T-Shirt being sold by the Mises Institute. I didn’t understand it at the time but I’m beginning

The Mises Circle in Houston, Texas; sponsored by Jeremy S. Davis and hosted by the Ludwig von Mises Institute. Recorded Saturday, 24 January 2009.

I particularly enjoyed “Monetary Lessons from America’s Past” by Thomas Woods – booms and panics of modern history.

The tail end of “Death Fuel” by Robert Higgs was particularly memorable. I guess tax is the fuel of death i.e. war. This talk is about state-driven war funding in recent history.

“The Gold Dollar” by Lew Rockwell is a must listen particularly for those already introduced to Austrian views. I am not terribly familiar with the anarcho-capitalism perspective which Lew brings. It’s refreshing and thought provoking.

I am not certain that a theory of economics can be completely addressed mathematically i.e. how the human response can be modelled accurately. Much of economic policy is driven by politics. Before listening to this lecture I had assumed that economists’ used uncertainty in their models but apparently not. It would be great to see a computer simulation of the economy to see if it supports the Austrian view (something like the flocking algorithms that games programmers sometimes use).

I still don’t know what the idea of economic equilibrium is. The Austrian’s don’t seem to talk about it. The Mises Institute recently produced a Stabilisation is Chaos T-Shirt. They seem to be believe that the market “chaos” is superior to government stabilisation.

It’s a shame that some of the audio is cut off at the end. Some audience questions are missing