The Probability Broach, chapter 1
Among the possessions of murder victim Vaughn Meiss, Win Bear spots something unusual:
The ambulance was ready to take our client to the taxidermists downtown. One of the techs passed by with a collection of plastic baggies containing personal effects. “Hold on. Let me see that.” He handed over a bright golden disk, larger than the silver dollars I remembered from childhood, in deep relief a picture of a bald-headed old coot with ruffles at his throat:
ALBERT GALLATIN
1761 C.E.-A.L. 76
REVOLUTIONIST, PRESIDENT, SCHOLAR OF LIBERTYOn the other side, an old-fashioned hillbilly whiskey jug, and forest-covered hills behind:
ONE METRIC OUNCE
GOLD 999 FINE
THE LAPORTE INDUSTRIAL BANK, L.T.D.
Win is puzzling over the strange coin and the unfamiliar dating system it bears when he’s interrupted by Oscar Burgess, the state security thug mentioned last week. Burgess doesn’t hesitate to pull rank, announcing that he’s taking over the investigation, which Win finds suspicious:
“What brings SecPol into a simple street killing, Burgess?”
… “You ought to know better than to ask foolish questions. We’re thinking about preempting this case – National Security. When the papers come through, you’ll have to turn everything over to us and go back to busting jaywalkers.” He grinned and watched his men confronting mine, knuckles white on holstered pistol grips all around.
“Didn’t realize there was a full moon last night, Oscar,” I said. He turned back, puzzled. I pointed to a tiny cut on his pockmarked forehead, dried blood at the edges. “Cut yourself shaving?”
He whitened. “Mind your own stinking business, Bear, or I’ll have you back working curfew violations!”
This, of course, is the injury that Win infers Meiss’ killer must have suffered. The book all but shouts it, so it’s not a spoiler to say that Burgess is the killer.
The reason he murdered Meiss, rather than arresting him, won’t be revealed until later. However, it has no meaningful impact on the plot, so I’ll spoil it here: Burgess has gone rogue. He’s running his own scheme on the side that he doesn’t want his superiors to know about yet.
After delivering the stock “you’re off the case” message, Burgess storms out. Win holds onto the coin, spitefully resolving to pursue the investigation on his own:
I signed six different forms and took the coin, to be surrendered at Properties tomorrow, on pain of pain. Eventually it would wind up in some bureaucrat’s pocket, or melted down to feed a multi-quadrillion neobuck federal deficit. Probably the former.
This is another detail that’s only vaguely sketched in, but it seems that in this dystopia, individual possession of gold has been outlawed. Win narrates: “Gold, legally kosher a few brief years ago, was presently hotter than vitamin C”.
This is reminiscent of when FDR made it illegal to own gold in 1933. It was a first step toward getting the U.S. off the gold standard, which was strangling economic recovery and prolonging the Great Depression. As long as the government was constrained by the requirement to be able to redeem dollars for gold, it was hobbled in what actions it could take. It was an arbitrary and artificial limit on the money supply that led to a deflationary spiral.
When the dollar was no longer tied to a finite gold reserve, the government could issue debt to pay for New Deal social programs, kickstarting the economy and ending the depression. The plan worked as intended, but despite its success – or more likely because of its success – libertarians and other goldbugs are still mad about it. They believe that the confiscation of gold inaugurated an era of government tyranny. There’s an echo of that reaction in this book.
The unusual thing is that unlike Ayn Rand, who declared that gold was “the objective value”, Smith doesn’t believe gold has any exalted metaphysical status. In his utopia, there are competing private currencies backed by commodities like wheat, iron, even whiskey. This is a consistent application of his anarchist politics.
But in spite of this, he persists in treating gold as specially significant. It’s no coincidence that the first big clue is a gold coin from another world (rather than, say, a paper banknote). It’s also not by chance that Smith’s tyrannical government hoards gold as part of its program of social control.
Libertarians have always assigned a talismanic, almost religious status to gold. They believe it’s “real” money in a way that fiat currency isn’t. Gold fever is so common among Smith’s ideological confreres, it seems he’s unconsciously adopted the same attitude, even though his philosophy doesn’t require him to. It’s almost like a vestigial trait.
There have been so many ads to get the rubes to buy gold to hedge against total apocalypse. This never made sense to me; in a complete and utter apocalypse, gold would be worthless. You can’t eat it, you can’t heal wounds with it, you can’t plow a field with it. You couldn’t even trade it for goods or services because you can’t eat it, heal wounds with it, or plow a field with it.
But gold does seem to be (quoting you) “talismatic, almost religious” to them/
What’s even funnier is how many goldbugs and libertarians are transferring their obsession to cryptocurrency – because they believe Bitcoin will somehow still function when the state has collapsed!
Just a quick question: Does this author mention other countries? In either universe?
Yes, he does. The first few chapters allude to an offscreen war with (or in?) New Guinea. Later in his parallel universe, we hear about anarchist revolutions in Europe, culminating in a world-war-like conflict between the newly “free” libertarian societies and the Czar of Russia.
Those ads are great – “Money will soon lose all value! Also, we’ll gladly take that soon-to-be-worthless money and give you gold for it.”
Exactly. For a “complete breakdown of civilisation” scenario, I think I’d rather have a few chemical drums filled with Benson and Hedges cigarettes, sealed in a nitrogen atmosphere to prevent degradation, and buried in strategic spots.
Benson & Hedges?! Hell no! Only Marlborough can be considered real currency! Introducing any other brand would dilute the value of the currency, and the (already collapsed) economy would collapse (even more)! And don’t even think of introducing “lite” brands… /s
abstractly i am reminded of that space shooters episode where commodore kick fights lizard lorn, and he’s like, “this planet has a wealth of minerals but i’d trade it all for a laser sword, or a good solid club!”
Wait, what about that “hotter than vitamin C” throwaway line? Does this novel also worship overhyped supplements?
I’m pretty sure LN Smith was getting health information from less-than-entirely-reliable sources.
The comic is not exactly the same as the book, but after the protagonist is severely injured and is being healed by magical Libertopian healing tech, his doctor tells him: “You were dying of malnutrition, deficient in the nitrilosides, lecithin, ascorbic acid, the tocopherols, degenerative diseases I’ve only read about.”
Ya-huh.
Why would vitamin C ever be banned? I suspect that Smith is ascribing actual malevolence to the Federalist government. If it’s good for you, you’re not allowed to have it. [*evil laughter from petty bureaucrats who delight in petty malice *]
Just what I was wondering. I guess Linus Pauling is a libertarian hero?
Or rather, Linus Pauling is a health crank hero, and crank magnetism occurred, as I suggested below.
Looking at the WikiP page for “Vitamin C megadosage”, I see that it wasn’t just Pauling, although he was no doubt the most prominent advocate.
I don’t think Smith ever explains what’s so important about vitamin C. I guess it’s some variety of libertarian health crankery he didn’t have the time to get into.
I would suggest that it isn’t precisely libertarian health crankery, but rather an example of crank magnetism; political cranks affiliate with health cranks and the crankery gets picked up, each from the other..
Why do we trust the 999s printed on those bars (and the fictional coin)? Or that a purported bushel of wheat is actually the right amount, to say nothing of isn’t adulterated in some way?
We’ve got a system that penalizes anyone who tries to defraud buyers with fakes and misleading claims, backed up by a Bureau of Weights and Measures, that’s why. Every civilized place does, and did, all the way back to Ur and Uruk. Keeping track of that stuff is a big part of why we invented writing in the first place. The Incas even invented all the same stuff independently (though not also the wheel) but did it rather differently, recording (at the very least) ledgers in knotted quipu tassels and the like.
Any ancap Galt’s Gulch is going to either lack a Bureau of Weights and Measures, or have multiple competing ones, and anyone buying a bushel of any damn thing is going to have to pull out a scale or a ruler and measure it. Without standardized units, anti-fraud norms backed by audits and policing of some sort, and all of that, transaction costs are going to be through the frigging roof compared to here and now. Heck, standardizing weights and measures is so beneficial (with everyone a winner and no losers) that in a world rife with climate denial, giant national disparities in income and things like public health, and wars, we’ve had no problem agreeing to let one little institute in France set a worldwide standard for what distance one meter is.
The most basic prerequisites for a fair game, or even one where at least everyone can agree on the outcome, is impartial referees and a level playing field. The minarchists on the libertarian right, at least, recognize this; the swivel-eyed ancaps who’d call even the minarchists “statists” imagine they can somehow have a functioning economy without these. Good frigging luck.
The Incas paid a price for not inventing the wheel, though. The people who did eventually also invented clockwork, made of lots of little toothed wheels, and then invented timepieces accurate and portable enough to bring on ships and use to do precise east-west navigation, not just following coastlines and north-south crossings†. I doubt I need to remind everyone what happened next.
† Latitude is easy: just find the pole star, or any other star with a known declination, and whip out a sextant. If the earth didn’t rotate, longitude would be equally easy, given a star with known right ascension. (Unless you were on the permanently daylit hemisphere, then you’d want to replace the clear lens in that sextant with No. 14 welder’s glass.) But it does rotate, so you need a clock that’s at least accurate to the minute. The Polynesians managed to colonize a lot of the Pacific islands without that, but I don’t think their methods scaled to continent-conquering volumes of travel, or they would have beat that Columbus dude by about 500 years and been there to greet him at Haiti.
Libertarians have always assigned a talismanic, almost religious status to gold. They believe it’s “real” money in a way that fiat currency isn’t.
Two things about that. First, a lot of those libertarians who once thought gold was the only “real money” ever, have also flipped over and started singing the praises of cryptocurrencies. Their dishonesty — and their sheer silliness — know no bounds.
And second, pardon the word-policing, but please stop calling non-gold-based currencies “fiat money.” That phrase used to mean one thing during the Soviet era (as in, currencies whose official exchange rates and goods-prices were literally set by state fiats); and too many people have since started using those words to mean something totally different from that earlier meaning. It’s dishonest and kind of Orwellian, and it’s part of the libertarian con-game that portrays both gold and crypto as instruments of “libbidy” and state-backed currencies as ipso-facto dictatorial and tyrannical.
…ads to get the rubes to buy gold to hedge against total apocalypse…in a complete and utter apocalypse, gold would be worthless.
True, but in a less-than-total-apocalypse situation, presumably at least some people would still be producing goods that others needed; and they’d want to be paid in gold if all the state-backed currencies vanished with the states. But even in that situation — assuming there’s enough goods and it’s even possible to move goods at all — most of those rubes’ gold will run out right quick. A more likely response would be states unlocking their gold reserves and using it to buy goods for the masses on a national scale, until things get rebuilt enough to go back to non-commodity-based currencies.
(Also, what happens to the value of your gold when people stop worrying about “the apocalypse” and stop panic-buying gold? Has anyone who ever bought gold from Goldline ever made a short- or long-term profit from it?)
But that’s all hypothetical — those ads aren’t appealing to any rational plan, they’re just selling a fantasy solution to a fantasy problem. Just like the imaginary friend who promises to save you from the imaginary enemy.
My understanding is that fiat money simply refers to any currency that’s not backed by precious metals. I’ve never heard that the term originated in command economies.
I think you’re in the extreme minority in this particular prescriptivism. It’s like peeving that “evolution” should only refer to biological evolution. Sorry, physicists and chemists have been using “evolution” to refer to physical or chemical change over time as well.
The phrase predates the Soviet Union by more than 40 years. You might not trust Wikipedia on the topic (which never even mentions the Soviet Union), but their page on the topic gives a specific citation of the phrase from 1878 which can be be found in the Internet Archive newspaper archive of the Chicago Tribune.
https://archive.org/details/per_chicago-daily-tribune_the-chicago-daily-tribun_1878-05-24_39/page/n3/mode/2up?q=fiat
(Middle column of the left-hand page; page 4)
You might not trust Wikipedia on the topic (which never even mentions the Soviet Union)…
Yeah, sort of like the Wikipedia article on Lyndon LaRouche that never once mentions his longstanding loony claim that the Queen was in charge of the entire Pan-American drug trade and was using it to destroy America.
It’s like peeving that “evolution” should only refer to biological evolution. Sorry, physicists and chemists have been using “evolution” to refer to physical or chemical change over time as well.
No, it’s not like that at all: the word “evolution” has the same general meaning in all those instances — change over time, normally in response to some events. I have yet to see the word used to describe something totally different from that basic understood meaning that it hadn’t been used to describe before.
As for that Chicago Tribune article, I couldn’t read the photo of the page, but there was text on the left that seemed to be the result of a word-search for “fiat.” The article it cites seems to be an editorial, railing against “fiat money” on the assumption that unlimited quantities of the stuff would be printed — which has not always turned out to be the case. So it seems that columnist is using the word as a slur — as today’s libertarians do — with the only actual fiat being “this is ten dollars” on the notes. And that doesn’t really work as a distinction, since gold-based currencies would also have fiats saying “this is redeemable for X amount of gold.” And if we agreed that all state-backed currencies are “fiat money,” then that would include metal-based currencies backed by states. So if we use the phrase “fiat money” that way, then it becomes a meaningless category.
(Also, that period of history was a time when progressives were trying to increase the money supply to enable economic growth, and rich reactionaries were opposing ANY move away from gold-and-only-gold-based money (because that would devalue all the money they owned and controlled). So one might conclude that that op-ed was written by someone in the rich-reactionary camp looking to discredit such a progressive move.)
And why use meaningless phrases when there are more descriptive phrases, describing more meaningful distinctions, such as “state-backed currency,” “precious-metal-based currency,” “floating-exchange-rate currency,” etc.? Seriously, use the words that best describe what you’re talking about.
The economy behaved differently in the days of the Gold Standard, but that had nothing to do with any intrinsic property of gold itself — except that it exists only in finite quantities.
In the days of the Gold Standard, a bank would be limited only to lend out as much money as the actual gold in their vaults, and no-one could keep borrowing indefinitely; eventually, a point would be reached where a borrower would have to call in some of the debts owed to them.
But if you consider what’s known in electrical engineering as diversity — the fact that you can have many more appliances than the supply is really rated for, as long as they aren’t all switched on at the same time — you can usually get away with lending a bit more money out in practice than you can cover, as long as the interest is coming in fast enough to satisfy the regular rate at which customers make withdrawals. That last bit is especially important; because if savers are not confident that they will be able to withdraw their money in full at any time in future, they might start demanding it all right now — and if more than a certain number of them get the nerves, and it starts spreading, then it’s Gave Over for the bank.
Let’s consider a farmer, who raises pigs and sells them; a butcher, who buys pigs, cures the meat and sells it; and a sandwich-maker, who buys meat, turns it into sandwiches and sells them. The butcher’s labour can turn £1 of pig into £10 of ham, and the sandwich-maker’s labour can turn £1 of ham into £10 of sandwiches.
One day, the sandwich-maker goes to buy £10 of ham from the butcher and pays with £9 in cash plus an IOU for £1. The butcher goes to buy £10 of pigs from the farmer, pays £9 in cash, and passes the sandwich-maker’s IOU for £1 to the farmer. The farmer isn’t keen at first to take on a debt owed by a third party; but the butcher points out that if the farmer ever feels hungry while passing through town, the sandwich-maker will have no choice but to accept that IOU, with their own signature on it, in part payment for a sandwich. Now the farmer has £9 cash + £1 owed from the sandwich-maker; the butcher has no cash in hand but enough pigs to make £100 of ham; and the sandwich-maker owes £1 to the farmer and has no cash in hand, but enough meat to make £100 of sandwiches. If the farmer subsequently bought £10 of sandwiches with £9 in cash plus the sandwich-maker’s original IOU for £1, the farmer would have no money, but plenty of pigs; the butcher would have no money, only £100 of potential ham; and the sandwich-maker would have £9 cash + the makings of £90 of sandwiches.
But what if, instead of seeking to get rid of the sandwich-maker’s IOU as soon as possible (as one might have to do in an economy where the total amount available to be borrowed was limited), the butcher had decided to sit on it and write out a new IOU of their own to the farmer (as if no such limit existed on how much money could be lent out)?
Then the farmer would have £9 cash + £1 owed from the butcher; the butcher would owe £1 to the farmer, have no cash in hand but enough pigs to make £100 of ham, and be owed £1 from the sandwich-maker; and the sandwich-maker would owe £1 to the butcher and have no money in hand yet, but enough ham to make £100 of sandwiches. If the farmer then bought £10 of sandwiches with £9 cash and another new IOU, then the farmer would owe £1 to the sandwich-maker, the butcher would owe £1 to the farmer and have £100 of ham plus £1 owed from the sandwich-maker, and the sandwich-maker would owe £1 to the butcher and have £9 cash in hand, enough ham for £90 of sandwiches and be owed £1 from the farmer.
There is now a cyclic debt through all three parties: The farmer owes £1 to the sandwich-maker, the sandwich-maker owes £1 to the butcher and the butcher owes £1 to the farmer. But if you sort of squint at it from an angle where you can only see the money owed to each person, it looks as though everyone has more money than they really do.
And the butcher especially appears to be in a very good position to borrow money; having a guaranteed customer in the sandwich-maker [if we ignore that at least some of the customer’s money is only promised, and may never come to light], and the ability to tenfold the value of the materials they buy [if we ignore their limited capacity for labour, and the diminishing returns inherent in hiring more staff].
There is thus a perverse incentive to keep lending out money hand-over-fist, and not worry about how it’s ever going to be paid back, because unrepaid debt creates the illusion of the economy growing. And bad actors can game the system by using borrowed money as collateral to borrow more money.
The fix need not necessarily involve gold, but will have to require accounting practices to pivot towards prioritising clearing existing debts over lending more money.
Please, please please do not call an ancap like L. Neil Smith an anarchist. What is called “anarcho-capitalism” is completely incompatible with anarchism, because classical anarchism has no tolerance of capitalism because capitalism inherently leads to hierarchy and oppression. I know this looks like a No True Scotsman to those unfamiliar with anarchism, but it isn’t and I can prove it. First, the left-wing anarchists called themselves libertarians for a century before the right appropriated the term. Second, capitalism is based on authoritarian, not libertarian, relationships (such as between bosses and workers, or CEOs and consumers). Third, Murray Rothbard, who coined the term anarcho-capitalism, admitted his ideas were not anarchist and that the only thing they had in common was a lack of a state apparatus. But anarchists also oppose hierarchy and private property, which “libertarians” fetishize. Anarchists are well aware that abolishing the state without replacing capitalism will just result in billionaires exploiting us even harder with the lack of regulations, which is why anarchists want to get rid of both the state and capitalism at the same time. If anarchism’s “failure mode” being the ancap’s preferred end state doesn’t prove these philosophies are not the same, then I don’t know what does. Really, we should call Smith and those like him “propertarians”, not libertarians, since they only really care about property, not liberty. Smith himself uses the term to describe his heroes in this very book, so it’s not a slur or anything. But if you won’t call National Socialism a form of socialism or the Democratic People’s Republic of Korea a democratic republic, because their actions belie their words, then why would you call anarcho-capitalism a form of anarchism based on the name alone?
Brendan: There’s a very good and obvious reason why hypercapitalists were able to appropriate your precious label: NO ONE ELSE WANTS IT. Seriously, the richest 1% are totally okay with abolishing those parts of a state that inconvenience them, but they still need cops and armies to keep the poor in line. But the rest of us derive absolutely no benefit from abolishing the state. And “anarchists want to get rid of both the state and capitalism at the same time” is just utter bullshit — how can anyone stop or rein in capitalism without a state? Can you name even one instance in human history where that’s been done?
This wasn’t meant to be a debate about anarchism or even an attempt to convert people. It was correcting the claim that anarcho-capitalists are anarchists. But the anarchists that existed during the Spanish Civil War seemed to be both anticapitalist and antistatist at the same time, but of course they were attacked by both Falangists and Republicans and so were defeated.
There is certainly nothing about these people that deserves to be called “libertarian”. They are out-and-out, “might-makes-right” authoritarians, who believe that it is ordained for the strong to exploit the weak. Their idea of “freedom” is based, not around the idea of preserving “freedom from harm” and to this end there are some things people should rightly be prevented from doing because they cause harm to others; but around the “freedom” to do and say whatever they like, without restriction, even if it harms others.
So-called “libertarians” are basically the worst kind of cowardly, spoiled children, who so resent their duty to contribute to the society that raised them that they have chosen to live instead as armed robbers. Their very mode of existence requires other people to form a cohesive society and contribute to its collective efforts, in order for there to be anything worthwhile for the thugs to steal. Of course, in this host society, everyone has to contribute not only their own fair share, but the share the “libertarians” refuse to pay as well. And if and when this society collapses due to the extra burden imposed by the parasites who insist it is not necessary, it ends up exactly the way you would expect it to end up when a bunch of crybabies with guns who don’t like being told to take a shower come with in smelling distance of one another.
You’re absolutely right, bluerizlagirl. (You’re talking about Smith’s people, right?) Hans-Hermann Hoppe even went so far as to say propertarianism was a form of monarchism. The fact he APPROVED of that shows what kind of people we are dealing with here.
I recall from somewhere that politician Daniel Patrick Moynihan once stated that the gold standard would put monetary policy in the hands of the gold miners. Meaning that the money supply would depend on how much the gold miners would mine.
I think that the attraction of the gold standard is that gold seems much more substantial than paper; it’s enduring, and it’s something that cannot be recklessly printed. The gold standard essentially makes paper money IOU notes for gold, which is what makes it seem to be worth something.
Bertrand Russell (“In Praise of Idleness” (?)) once mocked the gold standard as digging up gold in South Africa only to bury it again in bank vaults. He also said that during WWI, it was impractical to ship gold from SA to its destinations in North America and Europe, so while it stayed in SA, it would be counted as at its destinations. BR asked why not count unmined gold the same way? But there is the problem of verifying the quantity of that gold, and one has to mine that gold to be sure of that quantity.
Back in the ’80s, when Jack Kemp (of Kemp-Roth tax-cut fame) and libertarians were advocating a return to the gold standard, the biggest exporters of gold were South Africa (which was still under the apartheid regime) and the USSR. I know Moynihan was not the only one saying it was a bad idea to give those two odious regimes control over our economy.
Some medieval alchemists tried to make gold, but without any success. If one could make iron and copper and tin and lead from rocks, then why not also gold?
Alchemists mixed up a lot of legitimate chemistry with a lot of metaphysical and mystical flim-flam, like identifying the traditional seven metals with the traditional seven planets: Sun: gold, Moon: silver, Venus: copper, Jupiter: tin, Mars: iron, Saturn: lead, Mercury: quicksilver. Some alchemists even pursued the “gold” of mystical enlightenment.
But if they had succeeded, they would have lowered the exchange value of gold. Likely for this reason, King Henry IV of England decreed in 1204 the outlawing of the “multiplying of gold and silver”.
The alchemists failed, and one still has to mine gold and silver, though it is now possible to make them with nuclear reactions. I have attempted to calculate the cost of the energy input for doing so, using typical electricity prices, and that energy is MUCH more expensive than the resulting metal.
Even having to mine those metals does not necessarily prevent flooding of the market for them, as the people of Spain discovered in the 16th cy. when they brought back a lot of these metals from their New World colonies. “Everything is dear in Spain but silver”, according to a ca. 1600 saying.
This brings to mind astrology more generally, like in medical astrology, where signs of the zodiac are identified with parts of the body.
When Galileo discovered Jupiter’s four big moons, astrologer Francesco Sizzi wrote a book, “Dianoia Astronomica”, arguing that those moons could not exist. I have yet to find an English translation, so I found a scan of the original Latin version, and I translated the appropriate parts. FS mentioned the planet-metal correspondence (book page 25), and on book page 16, FS made an argument that will seem totally preposterous to many of us.
The traditional seven planets, 2 luminaries, 2 beneficient ones, 2 maleficient ones, and Mercury, erratic and indifferent, correspond to the seven openings in our heads: 2 eyes, 2 ears, 2 nostrils, and 1 mouth.
Therefore, Galileo’s moons cannot exist.