I think this is where I left off
There would be restraint on reserve holdings! The restraint is that it is fraud/counterfeit. But today the government/central banking makes it legal. If I pay you money to keep my gold safe for me with the expectation that I can have access to that whenever I need/want it (on demand), but you loan 80% of it out to someone else not expecting me to ask for it, and then I ask for it and you don't have it, that's fraud. Not only would that be illegal, but under a free market banks that did that wouldn't get business.
Its no different if thousands of people give you their money to store for them and you can't meet those obligations were they to all ask for their money at the same time. Now I can give you my money to loan out in return for intereset if we voluntarily agree to that, but thats different that fractional reserving demand/checking deposits.
Again, restraint on reserve holdings must come from some regulation. If it comes from the private companies that hand out judgements, then as I implied above, those banks with the most influence would win most judgements. Aside from that, the bank will only provide the system you describe if it is sufficiently profitable. If it must house money, costs of land, security etc. go up and they have no means to make money other than to charge you.
If banks can loan money, then they must have a fractional system or go broke.
But the government/central bank provides allows banks to do that, both legally and by providing liquidity, ie artificial money. And when this happens, the supply of money (M1) is increased dramatically. The numbers are really absurd. Checking deposits have been like 50 times the actual cash reserves in the banks. I think in like in the last 11 years its been an increase of 70% of the total of the last 88 years before that.
Believe me, I'm no fan of how money is created in this country. Fortunately, we are not arguing whether the current system is great, we are arguing whether you need authority in society.
lmao. Did you read my post? I pretty much agreed with the above when I said that malinvestment still occurs even without central banks, BUT *the malinvestment doesn't occur occur on anywhere near the same scale such that it throws an entire nations economy into a deep recession.* Mild recessions are part of basic market corrections, and are not to be frowned upon. Deep recessions caused by central banks inflating the money supply are.
To say "nothing to do with why bubbles occur" is dumb. a) it creates bubbles that otherwise wouldn't have occurred, and b) it makes bubbles that would have occurred much much worse and thus the subsequent burst much much worse.
You keep using monetary policy as a broad umbrella that is the source of all woes. You can't seem to recognize that wall st created a product with no regulation, and traded that product under no regulations. It is human excess that caused the deep recession and that will always exist.
I'll try to lay out some basic arguments about why your argument about the need for a central government enforcer to lay down the law is ridiculously flawed as succinctly and as shortly as I can.
lol. Every country on earth has a government and that's ridiculously flawed?
Regarding your argument that private protection agencies would constantly be clashing/warring with each other (my hit man is tougher than yours!).
a) This isn't true, but let's assume for sake of argument that it is true. Well, since there would be no overall State, no central or single local government, we would at least be spared the atrocities of inter-State (inter-central-government) wars. It's clear that the number of people killed in isolated neighborhood conflicts is absolutely nothing compared to the total mass destruction that has been caused by inter-government wars? Under anarchy with a multitude of private police/protection agencies, the only clashes that could break out would be local, and the weapons would be limited in scope and devastation. They could not use nuclear destruction, germ warfare, or other other forms of mass destruction since they would be blowing themselves and their property up too, as they are in the same geographic area.
When services are paid for the paid people operate on behalf of their benefactor. If two groups are paid for opposing interests, they will conflict. I don't understand what you mean by local, or how it is better. Are you suggesting a large multinational coporation could not exist, or act in all areas in which it does? Or do you mean that everyone else will automatically stay out of a conflict? Because if you look at the peanut butter and jelly markets, they are linked. If something bad happens to one, the other will suffer. So the jelly people have an interest in whether peanut farm agribusiness gets the land it wants to plant peanuts. They will align their forces with the peanut people. Which begs the question, how much money does trucking peanut butter and jelly earn for trucking companies? Because they might then have an interest as well.
Last, what is the difference between 100 people dying in 1,000 small conflicts and 100,000 people dying in a war?
It's the slicing off territorial areas into single government monopolies leads to mass destruction. When this happens, WMD's can be used, since it will be only "the enemy," the other country, that is hurt.
Why wouldn't WMDs exist again? If a corporation could use one to clear out a significant population from say, an oil rich place previously named Saudi Arabia, and then claim that land, why would they not do so? Since those people can no longer defend themselves as a group. WMD should probably be cheaper than employing several hundred thousand people to physically remove them individually.
*** Also think about this. We are living right now and always have lived in a world of international anarchy. That is, we have coercive nation States unchecked by any overall World Government. Do you advocate a WORLD GOVERNMENT?!?!?
By far your most cogent argument so far. Flawed though. People =/= States. Further, we have international law. Which gets ignored by anyone who loses a judgement to Antigua without penalty. And the world stage is acted upon and influenced disproportionately by wealthier and bigger States. Who invade whoever they want, even if that State had nothing to do with Osama Bin Laden. Wars start because the big States do whatever they want to small States when they feel like it. Sometimes the big States even duke it out with each other. Often in some poor small State's yard.
So yes, it is anarchic. But replace state with company above and you don't have the paradise of voluntary compliance and fairness you say come with anarchy. You have companies acting as they see fit too.
Maybe a better argument for you is homeowner associations. In fact, I haven't really thought about those until just now.
b) The above was a hypothetical, as these police forces wouldn't clash anywhere near that much. Take the issue of honest clashes of opinion. One important facet of protection service the police could offer their customers is quiet protection. The vast majority of consumers would want protection that is efficient, quiet, and with minimal conflicts and disturbances, and all the police agencies would be aware of this consumer desire. For you to assume that police agencies would be in constant battle ignores the devastating effect this chaos would have on the business of the police agencies. Thus, on a free market, the consumers would choose police agencies that would minimize conflict through mutually agreed upon contracts, and differences of opinion would be worked out through previously mutually agreed upon private judges/arbiters. Police companies would advertise these agreements, and consumers would pay for the ones that have made these agreements.
c) note that many private businesses, with the money they would save on taxes/regulation costs and with the freedom to defend their property as they see fit instead of being forced to rely on State rules, would hire their own guards. Other businesses would do the same. Homeowners would have their own police agencies and these would often be located in close proximity to their homes as that would make them more effective, and the market would surely desire the most effective service. This system would make crime far less pervasive. How often would someone try to rob a grocery store when there are 3 armed guards in it?
The police services would do a cost benefit analysis based on how much they get paid by the various interest groups vs other interest groups. Those police groups who do not choose the most profitable avenue will go bust. They will factor into their cost benefit analysis which of their customers are likely to shop around and which will keep them. Companies large enough will wonder why they hire out instead of having their own forces. Their own forces need not do any cost benefit because they are owned. Small enforcement agencies will lose to larger ones. Would you like 3 cops on call or 350? Homeowners can't compete with Walmart in terms of what they can pay. When they have an issue with Walmart, they can send their 3 cops. When those 3 cops get there and see the private army - sorry, guards - what do you think they'll do? And what do you think Walmart will do? Risk one of their guards or offer those 3 cops 30% more than they're getting to walk away?
Explain the collusion you referenced here.
I forget what it was now. Collusion in the cell phone market I think? If 3 companies dominate a market, it is more effective for them to not compete with each other on main points. That's why 2 year contracts dominate the cell phone market. I don't recall anyone ever saying, man I wish I was on the hook for 2 years. Instead they compete with each other on features or add ons. There are paygo options, but they cost more because the only providers with the appropriate network also happen to be the same guys who offer 2 year contracts.
One pet peeve - saying we need efficient government doesn't make any sense. a) bureaucracies can't be efficient because of their nature. The profit incentive, competition, and informational differences between a bureaucracy and a business will always make a bureaucracy inefficient. b) The 3 branched system of checks and balances was implemented to make government INEFFICIENT. If you want efficient government, get a dictatorship.
False. Efficiency is a matter of degrees. There are plenty, plenty, of businesses that are not efficient. I know several people who spend most of their workday on the internet. A bureaucracy does not have to be inefficient. It can operate as efficiently as the most efficient business. It just doesn't because people are people. See, I'm aware of the flaws human beings cause in government.