Too Much Month And Not Enough Market

This was nearly called “In Which I Defend Payday Lenders,” but that isn’t going to be the main thrust of it.
There’s been a lot of talk recently about payday lending and 6000% APRs’ and loan sharking, and who’s fault it is, and what’s to be done about it, and all the rest. Even in free market anarchist and libertarian circles they seem to be seen as a pretty bad thing, and in wider circles Earl may as well be riding a Pale Horse.

So, that 6000%APR. Well, it isn’t really, is it? Now, I’m admitting here that the only payday lender I’ve had business with is, but their 6000%APR isn’t, its a 6000% equivalent APR. They actually charge a fixed sum for the loan. Remember, these are payday loans, not mortgages. They lend you a sum, and charge you a fee for doing so, the representation of the fee as interest on the loan isn’t entirely fair (although presumably if you default then you’re screwed). You borrow a fixed sum and then pay it back (plus fee) in one go, no installments, no compound interest, no “annual.”

So… are they a bad thing? Maybe. Or, perhaps, the circumstances that lead to them existing are a bad thing. In a way.
You see, what Earl and his buddies are, actually are, at the end of the day, is a Market response to a gap. There is a demand for short-term unsecured loans and entrepreneurs have started to satisfy that demand in order to make a profit. Loanees value £100 today over £110 next week, and loaners prefer it the other way around. Both parties gain from the transaction and everybody wins. Loaners compete for business, keeping fees low and service good, and loanees choose who they prefer to deal with.

So where is the bad side? Well, obviously free adults can get themselves in a mess with payday lenders, just as they can with more traditional bank loans, credit cards, opiates, bingo, fixed-odds betting machines and any number of other things that most people are perfectly able to use wisely and some minority can’t handle. That isn’t really a bad side. The bad side is really the circumstances that lead to the niche in the market existing in the first place. That gap isn’t occurring (although the Market’s response to it is, much like the human body’s immune response to a foreign object) it’s caused by distortions.
“Too much month and not enough money” is the marketing slogan, and it is true enough, we’ve all experienced that feeling. Wages, especially at the lower end of the scale do not cover living expenses plus ‘some for a rainy day’ and so when the rainy day comes, you’re basically buggered. Car breaks down, cat gets sick, whatever- living hand to mouth doesn’t leave any room for unpredictable expensive emergencies and that’s where the payday loan comes in.

No, I haven’t joined the Left! This isn’t turning into a diatribe against Greedy Businessmen Screwing The Poor Out Of A Fair Living Wage. That’s a nonsense. To take that argument to its logical conclusion, the infamous Greedy Businessman would soon run out of A) employees and B) customers, as his employees starved to death and his fellow Greedy Businessmen’s employees stopped buying his produce due to being dead of starvation themselves- not generally seen as a state conducive to a bit of shopping.
Labour is a market too, that’s why we refer to it as a ‘labour market,’ and left to themselves businesses and workers would come to an equilibrium whereby wages and prices allowed even the lowest paid enough money to live on (although not luxuriously). Without artificial distortions this is the only way it can happen, as any other methods would be unsustainable. If one business cuts its wages relative others it will find it hard to recruit -or at least to recruit a competent workforce- and if one business raises its prices relative to others then it will find it hard to sell its products.

So what’s all this to do with payday lending? Well, unfortunately we don’t have a free market in labour or prices, what we have is a market filled with distortion piled on distortion. Benefit payments to the so-called ‘working poor’ coupled with high unemployment rates allow businesses to get away with paying lower wages than they otherwise would. Inflation makes prices rise y.o.y. when naturally they would fall, making it A) harder for people to make ends meet and B) easier for businesses to cut wages without workers noticing. Historically high taxes leech ever more of people’s wages. Zombie businesses stalk the land, attracting malinvestment and dependent on government bailout rather than being allowed to fail. Monopolies, duopolies and barriers to entry reduce competition and so on. So, we have a highly distorted market in which a large number of people find themselves worse off each year than the year before, possibly without even realising that they are, in fact, worse off (because their pay cut comes in the form of a below-inflation pay rise) and subsequently (and eventually) find their savings depleted (or in the young not started at all) and cannot dip into them when required. Clearly, people still need money for emergencies and unexpected outlays, and that’s where payday lenders come in. Their existence is almost inevitable, and to do away with them will not solve the problem, it will merely heap another distortion onto the market. The need will still exist, it will just be served in some other fashion.
Maybe even by the loan sharks on the black market that Earl and his buddies get lumped in with.


Life Without The State (addendum)

First of all, apologies for my lack of posts recently- I have kind of gotten out of the habit, plenty of posts get brain-drafted, especially now that the news is full of Real Stuff Happening but don’t quite make it as far as the WordPress site.
Never mind.
I’ve been reading a lot of Hoppe recently, and his writings often concern property, to whit property being either something you’ve bought, or something ‘previously unowned’ that you have mixed your labour with- heather you collected on the moor, a plot of land in the wilderness you built a farm on, you know the sort of thing. What’s been troubling me is at what point does something previously owned become something unowned?

The reason I’ve been on this train of thought is that in my surrounding area there are various buildings that are derelict, abandoned by the owners (mostly pubs, ok you got me there) and they obviously DO belong to somebody… but.
Now, I don’t want to get all moral and socialistic here… I don’t want to start saying things like ‘the community deserves better than to have these derelict buildings around’ and ‘the council should take them over’ and things like that, but what I would like to explore is whether at some point a squatter becomes a homesteader.

Forget the town for a minute. Imagine that somebody claims a piece of land in the wilderness. They build a log cabin, till some soil… then get fed up, or die, or marry some sort in the local town and move there, whatever. They leave. Twenty, thirty, forty years later you, homesteader, are scouting about looking for a place to live and raise your crops… this place is a good place, but the remnants of the log cabin still remain. Can you rightfully claim it? If the cabin is gone entirely, could the descendants of the previous owner turf you off, even after you spent maybe half your life improving that land, perhaps to a better state than that long-forgotten homesteader? In short, does a one-time claim to property, even if not exercised for many years, count?

So, back to the town again. Records possibly exist (although not always) so is it correct in this case? If not, why not? Is it correct in the wilderness but not in the town due to the record of the owner? Is it never correct? You could go crazy on that one… never sure if any land ever belonged to anyone before. Imagine the ramifications if people started laying claim to land that held important things. 1600 Pennsylvania Avenue, the Vatican, The Bank of England. Hmmm… If you could prove it… ok.
So. What if no record exists?

So now, for the final part of this thought experiment… we are doing this,without a state. Yesterday, the revolution happened, the State withered away and an anarchist situation entailed. There are no ‘official records’ no ‘official judges’ and only private solutions to these problems. You took over an abandoned pub, moved in, and started a thriving business. Nobody has cared about or visited or improved this building for several decades and it has lain unused for all this time. Are you a squatter? A trespasser? Or have you mixed your labour with something previously (albeit merely recently) unowned?

On The Rights of Man, the Freemen, and Libertarians

I’ve a lot of time for the Freemen, and increasingly less and less time for Libertarians. This post was brought to you in part, by the letter A, the number 42, the very public spat between the commentariat at the Libertarian Alliance blog and Captain Ranty (found here at their place and here at his place) and this thread at Samizdata. Actually it was the thread at Samidata that riled me the most.

I shouldn’t have a dog in this fight, I’m not a freeman, or in lawful rebellion and I am also not a libertarian (big OR little l), I am an Anarcho-Capitalist and very comfortable there. Really, however, all the four (five?) things I just mentioned should have more in common than we have different, and we all should be facing the same arguments with the people we meet in our daily lives. It’s just that for some reason the libertarian backwaters of the internet just lately seem to be full of snide remark and barely-concealed contempt for the freemen, who after all are walking their talk and putting themselves in jeopardy for their rights which is something that really should garner a fair deal of respect, not sideways-glancing remarks about ‘showing us up’ and alluding to their mental health with mealy mouthed quotes from Greek myth.

We are governed supposedly by consent, whether this is given implicitly or explicitly. This is supposedly the justification for everything our government does for (to) us, all the money it taxes (steals) from us to pay for it all, and so on. But what happens if you don’t consent? Do you just have to put up with it because everybody else consents? The libertarian commenters I have been reading would seem to say so, which is surprising given that it comes from the sort of people who sometimes append ‘individualist’ to their self-descriptions. Furthermore, even if a minority don’t consent, then claims to government by consent can only be mostly true, by definition. What happens when one withdraws or, more accurately, states that they have never given their consent and furthermore refuses to pay for it all at all is the experiment that the Freemen and Lawful Rebels are carrying out. They are choosing to use ancient laws and treaties and constitutional arguments to do it, but basically that is what they are doing, snide comments about using legal mumbo-jumbo to get out of paying their council tax nonwithstanding. They are giving voice to their non-consent and refusing to play the game any longer. Bravo.

And it is a game, a game of charades. If you cannot withdraw your consent then you cannot really be said to have given your consent at all. If you do not consent but keep quiet and pay up because you are afraid of the consequences then you are cowed into submission, not consenting. In reality, there IS no government by consent, and therefore in reality we are living in a dictatorship, regardless of the existence or not of concentration camps, secret policemen, political prisoners or any of the other trappings of state power- it is a question of magnitude.

The libertarians, especially those commenters at the LA thread, seem to think that this is just fine, or perhaps get too carried away with whether Magna Carta is repealed or not, or whether the version ratified by parliament is the definitive version or whether the version signed in 1215 counts forever, or other endless circles of argument and counter-argument to actually consider this reality. This is perhaps because, as statists (a question of magnitude again) libertarians believe that such a thing should exist and therefore by extension that it should have the ability to fund itself by confiscation of wealth from those people unfortunate to live under it and so on and so forth. All arguments I have seen from libertarians against Freemen accept this premise and argue whether Freemen are legally or lawfully correct in what they are doing (i.e. staying within the state’s frame) without considering whether one group of people (the state) have the right to demand that another group of people (everybody else) give them money, allow them onto their land and so on. It should be patently obvious to everyone, but especially to libertarians, that one group of people absolutely does NOT have the right to demand these things from another group of people regardless of what the two groups call themselves. If someone comes onto your land without your permission then he is a trespasser whether another man in a wig has said he can or not, and if a man in an office rifles through your wage packet then he is a simple thief.

People choosing to stand up to trespassers and thieves earn my respect, whichever means they choose to use to do so.

Jeremy Kyle as a Justification for Anarcho-Capitalism

Lots of people deride the Jeremy Kyle show -often with some justification- as one of the very worst examples of car-crash television, parading the weak and the feckless for the viewing public’s titilation, and I suppose it does. What it also does, however, is provide a very real and current demonstration of how voluntary associations and trade can be harnessed to aid people absent the state’s involvement.

The Jeremy Kyle show does help people. They have comprehensive aftercare and counselling as well as providing the mediation, polygraph, DNA analysis or whatever else is required to help the participants turn whatever corner in their lives they have appeared on the show to turn. Nobody is forced to appear -except by their consciences or desire for the truth- and most importantly of all, the services provided by the show are free at the point of use.

This is not to say that the producers, researchers, counselling teams or even Mr. Kyle himself are volunteers, donating their time and energy for purely altruistic reasons (not that there is anything wrong with that), they expect to profit from it. They put on a show that people watch, sell advertising and turn a profit from helping people, all without court orders or state-certified mediation services or any of the other tendrils the big state loves to infect people’s private lives with. From this we can show that absent a state, the profit motive would indeed lead enterprising people to plug the gaps in the market left by the state’s dissolution, and those enterprises would by no means be out of the reach of the poor.

Life Without The State part 2: Defence

This was originally one of the areas that gave me the most difficulty on moving from a minarchist position to a fully-fledged anarchist one. What do we do about defence? What about the Khomenis, the Obamas, the Bin Ladens? Surely, we’d need some sort of state, even if only to maintain nuclear weapons and aircraft carriers to protect us from nasty fellows like that?
Not neccesarily. With the exception of Bin Laden, most of the assorted nasties that stalk the world today are heads of states. States have wars with states. We may say that “we” had a war with France or Germany or Afghanistan, but in actuality it was the British State that went to war with the French, German or Afghan state and the people of these islands (and the people of those places) were merely the poor suckers who got dragged along for the ride, to fly the State’s planes, drive the State’s tanks and shed their blood in some far-off place to achieve the State’s goals. “We” did not win the Napoleonic War any more than “we” won the World Cup in 1966.

So simply doing away with the state may reduce or even remove entirely some of the antagonisms the people of these islands face. No state to wage wars on other states is also no state to interfere, indulge in covert or “black” operations and generally make a nuisance of itself overseas. Some people here may want to sell stuff, or buy stuff, or even volunteer to fight in your local conflicts if they wish but that’s about as far as it goes. “The British” would no longer collectively be defiling the land of your prophet or stealing your oil or whatever else it is that’s pissing you off.

But what about defence? When I originally became won over to this idea, it was Obnoxio who I discussed this with, and the general thrust of his argument (and what I finally grokked) was that an anarchist nation-? territory-? None of the standard terms seem to apply somehow. An anarchist geographical area wouldn’t work to the same rules when being invaded. There’s no taking the capital city and it’s all over, the whole place would need to be occupied by armies. Like many wars of recent times, the invader can take the cities, but not hold the countryside. Even in a small island like Great Britain there are lots of places to be, and it’s a huge, very expensive and possibly impossible undertaking to hold them all. This coupled with the likelihood of the majority of households being armed in such a place, what with there being no police pretending to protect people and all, any sane cost-benefit analysis is liable to find invading such a place to be unprofitable. Even a booming economy (likely without regulations or taxes hanging around the market’s neck like an albatross) wouldn’t serve as a rational prize, as the destruction of life, morale and infrastructure would likely ruin such a thing.

Of course, we don’t solely need to consider rational actors. In fact, none of the three examples I listed above could be described as rational actors. Khomeni and Bin Laden are both millenial religionists and Obama is a dyed-in-the-wool international socialist. All three and indeed many others may well decide that an Anarchornutopia land-of-milk-and-honey springing up in these islands would be worth any cost to bring under the yoke of International Socialism/ bring into the Ummah/ rule under the Caliphate and the idea of a long, bloody campaign wouldn’t necessarily put them off. It didn’t put off the worldly, rational (if wrong-headed) creed of Neo-Conservatism with respect to the Middle East after all.
But. Just because there is no state doesn’t mean people won’t organise. Such a thing doesn’t require any form of top-down goings-on. History is littered with examples of people spontaneously forming militias, partisan groups and resistance movements to defend themselves, their property and their neighbours. In all likelihood such militia groups would already exist in any case, partly for their social aspect and partly for any other number of reasons as they exist to this day in the United States. Any irrational actor invading such a place would not only find himself fighting house-to-house against householders defending themselves but would almost certainly end up fighting a protracted guerrilla war against a highly-motivated and fairly well organised partisan group. Such groups exist in Great Britain already, despite disapproval from those who pretend to rule.

The danger of invasion would still exist of course, but it does already. It’s pretty obvious that the Chinese or American State could walk in and take over any time they wanted- the fact that they haven’t is probably more to do with preferring the status quo to the world they would inhabit after setting such a precendent than any moral considerations. The British State doesn’t make it any less likely, but it costs a hell of a lot more money. Anarchy would require dealing with reality, and dealing with it without relying on nanny to come and scare the bad boys away. Bad things happen, and being adult enough to deal with them is part of the territory. Don’t you think it’s time we grew up?

Life Without A State part 1: Criminal Justice

Ok, so in my previous post I outlined total anarchy as, well. Not a system of government. Not a system at all, in any usual sense of the word… although of course people will organise themselves into systems of some degree. What I’m envisaging is a total lack of a system.

No police, no courts, no army, no politicians, no health service… nothing. Enough to make most quail… death on the streets, poor people dying of cholera, rape and murder a fact of life? Well, no, actually.

We’ll leave the NHS and other socialised health care systems out of it for a second, as alternatives can and do exist and move onto the more radical things I have mentioned. I was originally going to cover all of this in one post, but it’s become too long so I’m going to make it a series, starting with the police. How would life be without a police force? Before we go anywhere, perhaps we should look at the lower entries of this recent Samizdata comment thread which turned into an off-topic discussion of law, and lawlessness, and was in part the inspiration for this post. While I’m no legal expert and haven’t the foggiest regarding tort law, common law or any other kind of law it is clear to me that the situation we find ourselves in is hardly ideal… where the rich can buy (or sell) justice, where those who defend their kith, kin and property can go to jail while scofflaws and bandits go free. Where the police and courts and far more interested in holding aloft politically correct values and defending the status quo than protecting the public from wrongdoing. We’ve been educated by the media (particularly films like the Robocop series) to believe that without that ‘Thin Blue Line’ society would soon tear itself apart, but is that really the case? Perhaps there would be murders, rapes, burglaries and robberies… but don’t we have those now? And would it really be any worse? To suggest it would is to suggest that the law-abiding majority are only so because they live in fear of the police and don’t want to go to jail, which is to suggest that Mr. Bun the Baker who is always so nice to your granny would instantly turn on her and steal her purse if he didn’t expect Mr. Plod to be along on his beat fairly soon- it’s a nonsense.
Most people are not criminals simply because most people are not criminals.
In fact, I am almost certain that crime would be reduced in such a situation. Besides the oft-repeated points of well-armed gentlemen and ladies defending themselves in the street (and robbers never knowing exactly WHO is going armed) there is certainly the point to consider that you, your family and your mates are probably not going to stand for Mr. Bun robbing Granny and will head out for restitution- and surely they won’t be content with a slap on the wrist.

This would be a world where responsible householders would be armed as a matter of fact- and would-be burglars would have no way of knowing which were which. The same for Granny, and well turned out gentlemen in the street. A violent and lawless world for sure but, and I say it again, don’t we have that now? People get burgled, the streets aren’t safe at night, junkies and lowlifes rob dear old ladies at will and the Big State has proved time and again that it is either unable or unwilling to do anything about it.
So why pay them to?


Reading through this Samizdata post, and recalling the conversation I had with Obo, the question of politicised, militant expansionist Islam has once again caused me to re-evaluate where I stand on the political spectrum.

Let me say straight off, I have nothing against muslims particularly, and the way that modern muslim immigrants (as opposed to the influx of Pakistani immigrants that occured before I was born and who’s offspring I grew up with) tend not to integrate, keep within their own communities or even their tent-wearing penchants bother me not one jot as long as I’m not paying for it. Chinese people have been doing the same all over the world (minus the tent-wearing) for centuries without a problem. The protest marches and ‘death to the infidel’ placards do worry me, I will admit, but I have a hard time accepting that they should be stopped or banned, not least because that sets a precedent for stopping protests and banning marches.

And this is where it starts to get sticky. Not only does Islam stand for everything that I am against (and it has every right to) but even Vanilla Islam is ostensibly dedicated to spreading its creed by the sword and its more militant cousins just get worse from there. A little digression is in order here, perhaps.

My conversation with Obo, in which he pretty much conviced me on the merits of full-blown Anarcho-Capitalism centred mainly on my hangup that we need a State to protect us from other states… and his rejoinder that a fully-armed anarchic society that had to be taken street by street, village by village would simply not be worth the cost to any potential invaders. Ironically, the open sore that is the Afghan conflict is the most current example of this… showing that merely taking the capital (and even a few other cities besides) of a nation that is used to having no government doesn’t really get you a lot, except a lot of wasted time, money and lives.
Unfortunately, it also gives us another example. The fact that huge expenses in money, time and lives do not neccesarily put off ideologically-driven opponents. The ideology of the GWOT is only a decade old, and yet it has sustained that bizarre war, what sustenance then could an ideology many times that old give to conflict? Islam conquored Afghanistan, a place that even Alexander hurried through and a place that has defied in modern times the full might of both the USSR and USA.

So what then, of our putative anarchist Greater Britain and Associated Islands? Should the rest of the West fall (and given that world domination is in the very warp and woof of Islam, and given the extensive penetration of the West by unassimilated muslims and the Western penchant for appeasement, multiculturalism and special treatment for certain groups I’m far from convinced that it won’t) when the Jihadis reach our shores do I really think that a war lasting decades and costing maybe thousands of lives (all sent not down to Hades but off to 72 virgins) would put them off?


Which kinda leaves me stuck. Again.