Positive Liberty

Gold Standard: The debate continues on the gold standard. It’s been noted–saliently, I think–that the value of U.S. dollars in circulation is several times the value of the world’s entire gold supply.

Now, a doctrinaire advocate of the gold standard might reply, “consequences be damned!”–and some of them quite nearly do. But this observation has given me significant qualms, as reducing the dollar supply to a small fraction of its present value would entirely wreck the American economy. When you consider the economic costs of the United States (or the private banks thereof) buying up nine trillion dollars worth of gold, or of attempting it, but running out of gold long before they succeed–well, it ain’t never gonna work.

So, while I believe in principle that money should always be backed by something tangible, this is not a price I’m willing to pay. As so often happens when I discuss with libertarians, I find myself either the most moderate of the radicals–or the most radical of the moderates. What alternatives exist that would back our money by something durable, but that would not destroy the economy we already have? I’m all in favor of “liberty in our lifetime,” but I can’t convince myself to throw out the prosperity we have to achieve it.

Forgive, Don’t Forget: A deal is in the works to forgive some $40 billion that the world’s poorest countries owe to the world’s richest.

Or rather–let us be precise about it–the governments of the world’s poorest countries owe the money, and not their people, who had virtually no say in contracting these debts. Let’s recall that the governments in question are almost never democratic, rarely respect individual rights, and have manifestly not used this borrowed money to benefit their peoples.

By rights, I should be against this deal. Aid to the third world most often amounts to a tax on productive people in wealthy countries for the benefit of militaristic, repressive dictators who live like Roman emperors in the middle of third world squalor. And let’s not forget the bureaucrats and financiers who take their cut along the way, a point Paul Musgrave once made to dramatic effect. As a general rule, this money doesn’t help the poor, and forgiving the debt is not a gesture of kindness to the neediest people in the world. It’s a gesture of kindness to the repressive regimes that made them needy to begin with.

But then, consider the consequences of not forgiving the debt. Our cadre of dictators–sustained by corruption, brute force, and foreign aid–will repress their people even further to pay back the loans. You can bet they won’t be selling their palaces or dipping into their Swiss bank accounts. This is why we should forgive the debt, because enforcing it won’t do anything to help the situation either. It’s also the reason why we ought not to loan money like this in the first place. In other words: forgive, don’t forget.

Nappy Diatribe: I’m adding this brilliant but insane blog to my collection of daily reads. It’s sort of a black version of Fafblog, but it isn’t fiction. Or at least it isn’t supposed to be fiction (sometimes I do have my doubts). Also, no one at Fafblog ever talks about getting head in the back of a schoolbus. Then there are gutsy posts like this one and this one that keep me coming back for more. Henry Farrell of Crooked Timber complained last week about the lack of high-profile minority bloggers, but here’s one that definitely deserves more attention.

Oh, and HumanityCritic, if you’re ever in Baltimore, I’d like to buy you a beer.

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