Re: population sizes for colonising a planet


David Friedman wrote:
>
> "Will McLean" wrote:
>
> > Do you think
> > his description of "that class of money-lenders of whom they are the
> > representatives and agents" is a reasonable summary of their power,
> > motives and role in society?
> >
>
> No.

Why not?

I don't know if Spooner was right or not, but I don't think
his description was obviously unreasonable.

For example, the French Revolution was precipitated
by the insolvency of the monarchy.

Some remarks in Edmund Burke's _Reflections on the
Revolution in France_ are of interest.

http://www.constitution.org/eb/rev_fran.htm

'No acts of the old government of the kings of France are
held valid in the National Assembly except its pecuniary
engagements: acts of all others of the most ambiguous
legality. . . . It is not easy to conceive upon what
rational principle the royal government should not, of the
two, rather have possessed the power of rewarding service
and making treaties, in virtue of its prerogative, than
that of pledging to creditors the revenue of the state,
actual and possible. . . . The acts, however, of that
dangerous power (the distinctive mark of a boundless
despotism) have been alone held sacred. Whence arose this
preference given by a democratic assembly to a body of
property deriving its title from the most critical and
obnoxious of all the exertions of monarchical authority?
Reason can furnish nothing to reconcile inconsistency, nor
can partial favor be accounted for upon equitable
principles. But the contradiction and partiality which
admit no justification are not the less without an adequate
cause; and that cause I do not think it difficult to
discover.

'By the vast debt of France a great monied interest had
insensibly grown up, and with it a great power. . . .
The monied property was long looked on with rather an evil
eye by the people. They saw it connected with their
distresses, and aggravating them. It was no less envied by
the old landed interests . . . the pride of the wealthy men,
not noble or newly noble, increased with its cause. They felt
with resentment an inferiority, the grounds of which they did
not acknowledge. There was no measure to which they were not
willing to lend themselves in order to be revenged of the
outrages of this rival pride and to exalt their wealth to what
they considered as its natural rank and estimation. They
struck at the nobility through the crown and the church. They
attacked them particularly on the side on which they thought
them the most vulnerable, that is, the possessions of the
church . . . Along with the monied interest, a new
description of men had grown up with whom that interest soon
formed a close and marked union - I mean the political men of
letters.'

What Burke seems to be suggesting here, is that the 'great
monied interest', having acquired 'a great power', cut off
further credit to the French monarchy, not only because its
extravagance had made it a poor risk (though surely this
was true) but for the very purpose of toppling the monarchy,
and raising to power the allies of 'the monied interest',
the 'political men of letters'.

In other words, Edmund Burke, that paragon of _conservative_
political thought, was a paranoid conspiracy theorist. It was
many years ago that I discovered this, much to my delighted
surprise.

If Burke was right, then it is certainly plausible that the
monarchs of nineteenth century Europe lived in fear of a
repetition. It could hardly be said that they were secure
on their thrones, as shown by the events of 1848.

The financing of the American Revolution is another data
point. The common soldiers were stiffed of their arrears,
but the financiers got principal and interest to the
penny. Arguably the very purpose of creating the federal
constitution was to make sure that happened. In the
political debates of the time, it is striking how often
some measure was urged on the grounds that the government
must have 'good credit', which is to say that 'the monied
interest' must not be displeased.

There is also a phenomenon not mentioned by Spooner, at
least in the chapters we've been discussing. That is
the curious history of that curious institution, the
central bank. That's too big a subject to go into here,
but I'd like to offer a delightful quote from a paper I
know you're acquainted with.

http://www.cato.org/pubs/pas/pa017.html

'A fractional reserve system based on fiat money thus
economizes on the cost of producing something that costs
nothing to produce; it adds the disadvantages of a
fractional reserve system to the disadvantages of a fiat
system without adding any corresponding advantages. It
makes sense only as a discreet way of transferring some
of the income that the government receives from producing
money to the banking system, and is worth mentioning at
all only because it is the system presently in use in
this country.'

I've lately recollected that _No Treason_ is available
on-line. I would have linked it when I first mentioned
it but for that lapse of memory.

http://jim.com/treason.htm

> I have a rather vague
> impression that he was one of the 19th century figures who thought the
> natural interest rate was zero, and positive interest rates the result
> of something done by government, but I'm not sure.

Why would anyone think so? Does the argument admit of
brief summary?

Even if the opportunity cost of lending capital were
zero, there would be no reason to bother without
a reward. Indifference cannot motivate action, as the
Austrians like to say.

Spooner had a lot to say about interest in this essay.

http://www.lysanderspooner.org/Poverty.htm

I can't say I understand it all. One thing that's
clear is that Spooner understood risk premium,
as he devoted much discussion to it. He recognized
it as compensating a cost of the lender, and expected
the lender to expect 'profit' over and above such
costs. He wrote 'profit (in the shape of interest) is as
much the object of the capitalist, in furnishing the
capital, as (in another shape) it is of the laborer in
furnishing labor'.

Spooner did think government restrictions on banking
made interest rates artificially high, while at the
same time usury laws made credit unavailable to high-
risk borrowers. He thought interest rates would be
'very low' absent government interference, but he
doesn't seem to have had any illusions about a natural
interest rate of zero.

David Tomlin

.

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