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First Issue 15 May 2004
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Second Issue 30 August 2004
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Third Issue 10 September 2004
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Fourth Issue 19 September 2004
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Fifth Issue 26 September 2004
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Sixth Issue 3 October 2004
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Seventh Issue 12 October 2004
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Eighth Issue 21 October 2004
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Ninth Issue 28 October 2004
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Tenth Issue 4 November 2004
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Eleventh Issue 22 November 2004
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Twelfth Issue 29 November 2004
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Thirteenth Issue 7 December 2004
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Fourteenth Issue 13 December 2004
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Buy this essay and others in Jim's new book Being Sovereign.

The Indomitus Report

20 December 2004
Winter Solstice Tomorrow!

Being Sovereign

    "The Army notified me that DuPont had a new fabric to replace steel belting for high-speed tires. When I saw it, I realized it might be a great improvement over nylon for personal armor. Nicholas Montanarelli, then an Army Land Warfare technology specialist, and I took a piece of Kevlar® to a gun range. We folded it over a couple of times and shot at it. The bullets didn't go through."
    - Lester Shubin, c. 1991

One of the great ironies of contemporary technology development is the persistent pattern of centralized government agencies developing key technologies which make powerful decentralization possible, or much more effective. It may become a matter for serious contemplation and study, given the very significant implications. If the 500 year pattern of shifting technology that James Dale Davidson and William Lord Rees-Mogg have identified in their books (Blood in the Streets, The Great Reckoning, The Sovereign Individual) is a legitimate cliological pattern, it bears close scrutiny. Perhaps the seeds of decentralization are sown by the agencies of centralization.

Three such technologies come to mind rather promptly. First, and almost certainly foremost, is the Internet itself. In 1969 the Defense Advanced Research Projects Agency and its contractors designed a robust "inter-networking" protocol which was anticipated to allow any computer networks that survived a nuclear attack to continue communicating. This highly robust system of "transfer control protocol" and related technologies became the basis for tremendous advances in communications. By 1973, a commercial version called Compuserve was available. By 1983 the use of e-mail and USEnet newsgroups were widespread if not yet universal. By 1993, the development of higher speed wide area networking tools including 56K modems, T1 and T3 lines, fiber optic cable, and high speed routers made it possible to digitally connect huge libraries of information, leading to the development by Tim Berners-Lee of the world wide web.

The implications of the Internet are simply staggering. The only meaningful comparison is the adaptation of the printing press and movable type to European languages. Very likely, the printing press was a well developed technology in China and Japan by 1450 when it was adapted by Gutenberg to European needs. Within a few generations, the foundations of European orthodoxy were being rocked by the widespread availability of printed bibles. Less than 200 years later, the widespread use of printing presses to publish "libels" and circulars brought King Charles I to the executioner's block. Just about the time the media conglomerates had organized the print media in much of the developed world, the Internet arose, not only through the efforts of defense contractors but ultimately and most importantly through the operations of free markets. Now information is totally "out of control." It is possible to move data around the world within seconds. It is possible to replicate information at dramatic speed. The ability to control what people know is increasingly limited, and the conceit of controlling what people say is increasingly pointless.

The second key technology is public key cryptography. It is now possible for ordinary people of no particular technological talent to encrypt text messages and files using a simple point and click interface to make military grade encipherments. It is unlikely that any technology short of quantum computing could break high level public key cryptograms within a useful period of time per key. Moreover, quantum computing itself presents opportunities for quantum encipherment algorithms which are theoretically unbreakable even with quantum computers. By making privacy widespread and effective, enormous volumes of activity can take place across inter-networked computer systems worldwide. Since encryption has never previously been widely available, the only historical comparison would be to the flowering of literacy brought on by cheap printing. (Writing is a way of "encrypting" data from the spoken word understood by everyone to the written word understood only by those in the know.)

The final technology that promises to revolutionize our world is the development of effective and low cost body armor to protect against bullets. By making it economically feasible for an individual to outfit himself with a bullet proof vest, bullet proof leggings, a kevlar® helmet, and ceramic chest and back plates, contractors ostensibly working for the centralized powers-that-be have apparently contributed to powerful decentralization. It is now harder than ever for government to effectively project force against those determined to be free.

The history of body armor is very ancient. If one considers all manner of possible threats, such as extreme cold, extreme heat, blades, bullets, shrapnel, rock projectiles, arrows, chemicals, fire, or radiation of all sorts, then the history of body armor is the history of clothing.

In fact, the human body itself does remarkable things for defense against chemicals, temperatures, and radiation. Biology provided us with melanin to darken our skins against radiation, especially from sunlight. We have skin cells that make a useful defense against many chemicals. Layers of fat protect against cold. The pads of our fingers and other parts of hands and feet become easily calloused with exercise or frequent exposure to hot objects. But, we weren't provided with nearly the thickness of hide that many animals have, as any butcher can attest. We lack great night vision (so we'll discuss another invention in a future essay - night vision goggles!) and we lack exceptional talons or tusks for defense. As cursorial hunters we share with dogs a tremendous endurance which more than makes up for the fact that we can't run as fast as most other creatures. Cursorial means "by walking" and hunters can simply walk game to death by coming into contact frequently enough that the prey startles and runs quickly away, until it is so tired it falls over.

We invent things to make our lives better. Our greatest physical attribute seems to be our advanced brains. No other creature makes a habit of wearing the hides of other creatures for warmth, or using their bones for needles and clubs. We've been known to use animal sinews for thread, animal hides for thongs, tree limbs for spears, iron for knives, flint for arrowheads, and flint and steel to make fire.

Of course, this inventiveness brings us into contact with a lot of options. Technologies are themselves neutral in intent, being able to provide for defense or offense, good purposes or ill, benevolent intentions or evil, depending solely on the ethics and desires of the user.

So we have clothing. We use cloth to protect from sunlight, from cold weather, from eager viewers, and from injury. Hides deteriorate so we developed tanning. Tanned leather is also more durable so we see early men building armor from leather. Layers of leather and wood or leather and steel may be more effective against blades. Wood, then bronze, and then steel made effective shields against clubs, blades, or projectiles. The ring is an exceptionally strong shape, and linked rings make chain mail possible. Ultimately, men built suits of steel plates and climbed inside. The development of the stirrup allowed an armored man to control a horse and remain mounted, while the advent of the block and tackle helped get the heavily armored knight onto his horse.

The heavily armored knight begins to appear in Europe in the Ninth Century. By the Eleventh Century, heavy cavalry is the decisive technology. By the Fourteenth Century, twenty-foot pikes developed by the Swiss make an effective defense against heavy cavalry. The English cloth-yard arrow and the six-foot yew longbow become an effective offense. So effective, indeed, that at Agincourt in 1415, Henry V defeated a force of (by some accounts) 35,000 French knights and as many as 65,000 peasants with a force of 400 knights and about 4,000 yeomen armed with longbows. (It bears mentioning that Henry did so by choosing the time and place of battle very carefully to place himself uphill from his enemy with his archers hidden in forest and the Sun in his enemies' eyes.) Within 40 yards, a longbow could shoot an arrow through an armored knight.

Meanwhile, gunpowder was on its way. It is not completely clear when the technology of gunpowder was developed. Certainly by the Eleventh Century it was widely known in China. Rockets and fireworks were soon adapted for more martial purposes. Cannon begin to be deployed in the Twelfth Century, grow larger and then, quite cleverly, grow small enough to be handled by a single combatant. Guns are an innovation, and are powered not only by gunpowder but by compressed air and other technologies. It is the advent of effective muskets or shotguns which spells the doom of metal armor. By the dawn of the Sixteenth Century, metal armor is on its way out. Cuirasses of metal continue to be worn for another century, especially where combatants are likely to encounter blades, and against technically challenged peoples in the New World.

Meanwhile, a clever use of fibers to produce a soft body armor was underway in Japan. The medieval Japanese began developing body armor using layers of silk. After the Japanese ejected most foreign traders, their silk body armor remained effective against the bullets they were capable of producing, but not cost effective for most of their troops to own. Garments of silk body armor from the 1901 to 1914 timeframe were reputedly capable of stopping bullets with muzzle velocities of 400 feet per second. Unfortunately, handguns were even then producing velocities of 600 feet per second or greater. As well, the garments were about $2000 each in 2004 dollars, unacceptably expensive for most users. There is a report that Archduke Ferdinand of the Austro-Hungarian Empire was wearing a bullet proof vest of silk fibers during his fatal drive through Serbia in 1914. (This possibility utterly fails to explain why his entourage was deficient in weapons and ammo.)

Aramid fibers were developed by DuPont and others. These include nylon. Ballistic nylon was used for moderately effective flak jackets during WW2, Korea, and Vietnam-era conflicts. We use the term moderately effective since they accomplished a key objective. As the name implies, flak jackets were developed to help protect airmen from enemy anti-aircraft munitions or "flak". It turns out that one of the leading causes of battlefield injuries and combat deaths is shrapnel.

As a term "shrapnel" is a sort of catch-all, referring to the fragments of munitions, shell casings, artillery shells, parts torn loose from other things by artillery shells, even bone fragments from your buddy may become shrapnel. The term originally denoted an anti-personnel artillery shell containing metal balls and fused to explode in the air just above enemy troops, a particularly devious invention of General Henry Shrapnel (1761-1842) of British artillery fame.

If flak jackets of aramid fibers could be effective against shrapnel, then perhaps a para-aramid would be even better. In the early 1970s, DuPont again came up with a clever fiber. Kevlar® is synthesized from alternating monomers of phenyldiamine and terephthalic acid. Concentrated sulfuric acid is used in the manufacturing process, which seems to contribute to kevlar's high cost. It is, nevertheless, worth having.

One of the reasons kevlar makes a better fiber for body armor is its ordered structure. Kevlar® fibers are like strands of uncooked spaghetti laying straight side by side, rather than like cooked spaghetti in loose configurations and agglomerations. Thus, the crystalline structure of kevlar® provides much of its strength. By 1973 the US Army had developed a vest design with seven layers of Kevlar® for testing.

The Army soon discovered that Kevlar® becomes much less penetration resistant when wet. Sadly, it is eager to absorb moisture. Rain and sweat make it nearly unworkable due to added weight and lower penetration resistance. Dry cleaning chemicals and bleach deteriorate the material, as does sunlight and other ultraviolet light. Repeated washing is not helpful. So, vests are designed with waterproofing and fabric coverings to limit problems from sunlight and other degradations.

With a means to stop some bullets, it was important to establish that wearing body armor would prevent death, as well as stopping bullets. The impact from a bullet stopped by body armor may still cause blunt force trauma. Severe bruising is typical, and critical organs may be damaged, potentially causing death. One of the critical organs is the lungs, which may become very damaged by blunt force. Bruising of the lungs may cause a pulmonary edema or "lung bruise" which can be deadly.

In 1975 the government tested 5,000 kevlar® body armor vests at 15 urban police departments. These tests were to establish the comfort and wearability of the garments. It turns out this feature is critical to the usefulness of body armor, since bulky and uncomfortable armor won't get worn.

As a problem, that particular aspect of body armor hasn't gone away. Armor remains clunky and heavy. Because it is damaged by sweat, it is packaged in moisture-proof packaging. The difficulties are so great that agents in the field are often reluctant to don their gear. A famous incident involving several FBI agents on the trail of known armed bank robbers was made much deadlier for the agents because they failed to put on the body armor they had in the trunks of their vehicles.

At about the same time, a number of very interesting developments in the field of ceramics began to come together. Pottery is one of mankind's oldest technologies. Pottery shards are so widely used, across so many thousands of years, and pottery styles are so particular that it is possible to date five or six millennia of human history within a few decades by individual pottery fragments.

Pottery at its most primitive provides an early plastic. Clay is plastic or shape-able. It hardens in sunlight to hold its shape, although sun fired clay typically dissolves in water. Fire holds the key to effective pottery. Fire hardened clay is much less water soluble.

Ceramics are like kevlar® in being a crystalline structure. As science has developed new techniques for analyzing crystals and their structures, technology has provided a vast new array of ceramics to examine. It is now possible to make ceramics out of a bewildering array of materials, having features that were previously uncommon or unknown in ceramics. Ceramics are no longer only the brittle porcelain and clay things you remember handling with care and occasionally breaking. Ceramics are now as likely to be resilient, rubbery, able to withstand high velocity impacts, and heat resistant to enormous temperatures. So exciting were the developments in ceramics in the late 1960s and early 1970s that NASA chose to cover its space shuttle orbiters with enormous arrays of nearly hand crafted ceramic tiles in place of single-unit ablative heat shields in the search for reusability.

In the case of shuttle tiles, the reusability quotient was persistently over rated. In operation, shuttle tiles frequently fell off, had to be replaced, involved enormous skilled labor to manage, select, trim, and place, and were not universally regarded as safe. The orbiter Columbia was struck by ice-laden foam insulation near the leading edge of one wing which opened a crack in some of the heat-shield material, ultimately causing the loss of the vehicle and the loss of seven lives. The tiles were unable to compensate for the entry of hot plasma into the inner wing structures.

Meanwhile, in the area of ballistic armor, ceramics have proven incredible. A ceramic chest insert converts a vest from being able to withstand handgun rounds up to .45 caliber up to an ability to withstand high powered rifle bullets up to .308 from distances as close as 100 yards. In future, ceramics may be able to augment body armor capabilities to preclude much heavier rounds, though at some point the blunt force trauma involved is likely to result in chest flail type injuries, unless more effective shock absorbing technologies are developed. There are rumors of developmental liquid body armor to provide for substantial new shock absorbing capabilities.

Before leaving this topic, we wanted to touch briefly on the Zylon® controversy. Apparently, some manufacturers seeking government contracts are capable of considerable spite. Zylon® is a softer body armor material. Its leading proponents at Second Chance in Michigan have had to reorganize under bankruptcy protection, owing to various claims against their technology. If one lesson has been learned over the years it is that comfort does matter. Zylon® seems to provide a fabric that is more comfortable to wear, and body armor won't do any good if it isn't being worn when you get shot.

Another new development, SpectraShield offers similar wearability advantages with added penetration resistance. It uses Spectra® fiber from Allied Signal. Spectra® is a high strength polyethylene fiber. Spun and cooled, the fiber forms a gel with uniform fiber directions. Layers of this fiber are arranged to cross at right angles, separated by a flexible resin to form a strong cmposite.

A competitor Akzo Nobel offers an aramid fiber Twaron® for body armor. A Dutch competitor makes Dyneema. We anticipate having more information for an update on this topic in a few weeks time.

Next week, knives, the ultimate tool for close quarters combat.

Free Market Money

    "Inflation will destroy debt. The end answer to all argument rests in the Federal Reserve and the government. Both are absolutely committed to preventing a financial collapse or deflation. As long as they're willing to print dollars to support any failing creditors, the cycle will go on. What most deflationists fail to consider is that inflation destroys debt.

    "Creditors win through inflation and lenders lose. The deflationists do not see that if inflation of the money supply continues, which it will, there never needs to be a deflation. All the debt in the world can be wiped out just by creating purchasing power -- and that's exactly what is happening...the debt problems will be resolved, but they will not be resolved by debt liquidation through bankruptcy and collapse. They will be resolved through debt liquidation via the creation of money. We are in for the greatest wave of inflation in the history of the world. You had better not be on the wrong side of the dollar."
    - Jack Pugsley,
    "Common Sense Viewpoint"

We were pleased to receive the December 2004 issue of Doug Casey's International Speculator. Doug had our subscription comped to thank us for helping out at the table at the New Orleans show. This event reminds us of Woody Allen's old line, "Ninety percent of success is just showing up."

One of the nice things in the newsletter is Doug's discussion of ways to own gold. We didn't especially like the title for this section "gold in the modern age" since we think of modernism as a sort of 1920s version of vicious socialist knavery. Evidently the world hasn't adjusted to our usage of "currency" and "the current era" to describe contemporary events.

Doug points out some of the advantages of buying and storing physical gold. Since he charges a subscription fee, we suggest you buy his newsletter to get the inside scoop on his advice. What he says about having a tube of 10 gold coins of one ounce each as highly pocketable, liquid, and compact value is common sense. He also speaks to the issues of paying vault fees, buying gold from various locations (we prefer among others), and physical gold substitutes.

We disagree with Doug on the whole "Perth Mint Certificates" idea. Mind you, as government entities go, this mint owned by the Western Australia government may not be as bad as others, and they do offer insurance against fraud and theft. But, check your policy. We're not sure where Lloyd's comes down on "force majeure." We suspect that if push came to shove and the government seized the gold in the mint, you are unlikely to get much for your money.

One of the delightful aspects of this newsletter, and one we feel called upon to comment favorably about is the mention of e-gold and GoldMoney as methods for holding gold. Doug mentions both, makes a few deft comparisons, and evidently favors GoldMoney. He also mentions the prospect for SilverMoney, coming soon from the folks at GoldMoney.

Doug finishes out that discussion by discussing the exchange traded funds. He seems to find them a difficult way to hold gold and of doubtful merit. He points out that the GLD fund from the World Gold Council project requires block purchases of 100,000 units or ten thousand ounces of gold.

Doug is one of the best known anarchist, atheist, liberty enthusiasts in the world. He comes by his anarchism through personal discovery, having started from a "John Wayne" phase of enthusiasm for the Marine Corps. He comes by his atheism in like fashion, having started with a Jesuit education. Doug is a world traveler, having visited dozens of countries, often when other tourists are shunning them. He's a brilliant contrarian investor and makes persistently effective investment advice available to his subscribers.

We met Doug at the International Society for Individual Liberty conference in Mexico in 2002, having heard him speak at the Foundation for Economic Education FEEFest in Las Vegas earlier that year (where we met Jim Turk). After the event, Doug invited us to attend his Eris Society conference, which was chock-a-block with free market money enthusiasts and classy investors. We saw our acquaintance Wes McCain (we met Wes in 1995 when Courtney Smith introduced us at an event) and made the acquaintance of our famous namesake James Dale Davidson, a man of tremendous charm and courtesy.

You'd do well to consider a subscription to Doug's newsletter. He's got a lot to say, and none of it is favorable to government.

Gold Mining

Here's how the stocks we presently suggest in this area look right now:

Company Symbol C$ US$
Almaden AMM.TO 1.70 -
Free Gold ITF 0.35 0.30
Luzon LZN.V 0.24 -
- C$0.05
Lumina LCC - 4.36
- 0.28
Newmont Mining NEM - 44.91
Northgate NXG - 1.57
- 0.08
Silver Standard SSRI - 12.27
- 0.38
Vista VGZ.TO 4.75 -
- C$0.25

Newmont appears to have bottomed and is rising. There may be further tax loss selling this week or next, so be watchful. Almaden's price drop seems to have slowed. FreeGold's drop has increased. Luzon and Lumina seem to have slowed their descent. Northgate and Vista have not. Silver Standard joins Newmont in appearing to have bottomed, and is now rising.

We encourage you to time your buys carefully and keep trailing stops in place to prevent losses.

Free Market Money

Gold and silver have recovered somewhat from their lows earlier this month. We're still expecting them to regain lost ground and perhaps set new highs by year end. Gold is still $40/oz off our expected $480/oz by year's end. Might still get there.

The two stocks we've suggested in this sector are PVH and MCG. MCG is unchanged at .513 grams. PVH is well down at 0.025 grams. We hope to have a report for you on developments with Pecunix and PVH to account for this dramatic drop, soon.

Space Frontier

    "Worse, the arrogant, defensive, know-it-all NASA culture that was blamed for the Columbia disaster by the panel that investigated the calamity has not been changed or reformed by O'Keefe - inviting speculation that trouble lies ahead."
    - Alcestis "Cookie" Oberg, 19 December 2004

Neither Cookie Oberg nor the Houston Chronicle editorial staff go far enough today (Sunday 19 December 2004) in their views on Sean O'Keefe's replacement at NASA. The next person in charge of NASA should be a liquidator, not an administrator.

Burt Rutan's team at Mojave Aerospace has shown that the private sector, when left alone, can put humans in space. Bigelow Aerospace is planning a hotel in orbit to dwarf the space station. Billionaire Richard Branson is offering to fly people into space and has already enough customers to add $1.5 billion to his revenue. NASA is not opening the door to space, it is being the door.

Meanwhile, if NASA doesn't want the Hubble Space Telescope, it should encourage the private sector to salvage the giant space system and continue operating it for the astronomy community. The opportunity to privatize the Hubble would be a hundred times as lucrative as the Ansari X Prize.

Liquidating NASA is simple. The Johnson space center goes back to Rice University. JPL stays with CalTech. NASA Ames gets split between Stanford and Berkeley. Marshall becomes a part of Univ. Alabama Huntsville. Each field center becomes a part of a nearby university. The state and private universities pick up whichever employees they want to keep. The rest go to work cleaning bathrooms in DC.

In a time of rising budget deficits, George W. Bush gets to write down over ten billion dollars of wasteful spending. And he still gets his bold new space initiative, paid for with private sector space development companies rather than on the public dole.

The above paragraphs are the text of a recent letter we sent to the Houston Chronicle. We don't expect it would be published.

Here's how things stand for the stock we suggested in this sector:

SpaceDev is at $1.80. Still. It is up $0.30 since we first recommended it, well down from its peak. Based on our earlier discussion, you should have formed a trailing stop and presumably sold your position. However, we continue to monitor this stock against our earliest buy recommendation.

In addition to being a propulsion contractor for Rutan's Mojave Aerospace team, SpaceDev is planning its own launch vehicles. On 15 December 2004, chairman Jim Benson weighed in with remarks praising the Commercial Space Launch Amendments Act passed by the Senate earlier this month and urging Bush to sign it.

Launch Technology

    "The world has recently seen that the private sector can go from concept to man in space in dramatically less time and for dramatically less money than governmental programs."
    - SpaceDev press release
    15 December 2004

A recent press article quoting one of the XCor Aerospace principals caught our attention. It turns out that XCor has converted one of Rutan's kit planes, a Long-EZ, to use twin 400 pound rocket engines. The engines are fueled with isopropyl alcohol and liquid oxygen carried in an external fuel tank. The company sees the vehicle as a test article for gaining experience with manned rocket-powered systems. Their next vehicle is to be suborbital, and in that regard they've obtained an FAA license for a manned suborbital vehicle.

XCor has some believable credentials. As a company they have fired rocket engines over 2000 times. Their converted Long-EZ which they call "EZ Rocket" is flown under contract by Dick Rutan, one of the pilots of the Voyager 'round the world aircraft and brother of Burt.

Company executive Aleta Jackson, an old friend of ours from our L5 Society days, says, "We want you to own your own space-plane, and that's not an impossible goal - it can be done with current technology. Making that technology accessible to everyone is why our company exists. We believe that what we're doing will pay off for us and our investors because space tourism is going to be a big business very soon....Space Adventures has a contract with us for 600 rides which they're selling at $98,000 each."

The revenues of $58.8 million certainly sound good, although it cost about half that amount to develop the SpaceShip One vehicle to its current operational capability of three flights (one back in June 2004, two this past Autumn). Meanwhile the Mojave Airport has filed to be certified as America's first inland spaceport. Things are getting interesting out there.

New Country Developments

It is certainly the case that governments excuse their "papers please" mentality by insisting that there is no way to validate a person's identity without papers. We agree with Dennis that personal reputation and recognition are much better ideas.

In fact, you should always ask yourself why you would need to see someone's identity papers. Suppose they wish to write a check? If you know them and trust them, seeing identity papers doesn't help you trust them more. Perhaps you should have a policy that checks are not acceptable. Perhaps you should motivate other types of purchases with discounts for cash or gold. If there is a way to avoid the fallacy of identity papers, please do. After all, identity papers are multiplying entities you don't know whether to trust unnecessarily.

Just when the Holiday blues seemed certain to set in, we received our Fall 2004 issue of Freedom Network News from The International Society for Individual Liberty is operated by Vince Miller and Jim Elwood. Vince was the organizer of the founding conference, as we gather, and our late friend Michael van Notten stood up at that meeting (c. 1982) and suggested that the group not become a politically operated group mired in committee meetings. Rather, he suggested it should be run as an entrepreneurship. It has been, ever since.

Topping the newsletter was Vince's excellent report on this year's world conference in Rotorua, New Zealand. ISIL meets every year with delegates from around the world. This year's conference was hosted by Jim Peron of Aristotle's Books and the Institute for Liberal Values. Master of Ceremonies was a member of the NZ parliament, Rodney Hide, leader of the Alliance of Consumers and Taxpayers party and something of a Ron Paul figure in his country. Speakers included 5% of the NZ legislature, including one from the National Party, one from the Labour, and two from the United Future party.

News from Mongolia and Elbegdorj Tsakhia, one of the leading liberty enthusiasts in that country: Elbegdorj has won 34 seats in the legislature for his Motherland Coalition party. The communists, evidently with typical skullduggery at the polls, stuffing ballot boxes and intimidating voters, attempting to seize the radio station at Ulanbataar, "won" 36 seats. The balance of power includes two seats under dispute, three independents and one for the new Republican party. A coalition was in the offing with the Motherland and the independents forming a government to hold the communists at bay, which we gather has resulted in Elbegdorj being named Prime Minister. More data on Elbegdorj at the ISIL site.

NZ real estate developer Dave Henderson kicked off the conference with a presentation about his difficulties with NZ's Inland Revenue bureau-rats. Appearing to have survived his difficulties and the related bankruptcy reorganization, and having won against the rats, he now owns the building in Christchurch where the Inland Revenue has a regional office. So, he's gone from tax victim to landlord of the tax authority in short order.

We understand that Sharon Presley, co-founder of Laissez Faire Books (we met her at the FEEfest in Vegas back in 2002, which was also the 30th birthday party for her bookstore) is releasing a book this month Exquisite Rebel anthologizing the essays of anarchist feminist Voltairine de Cleyre. Her web site is

Lockwood Smith gave a report on NZ politics from the perspective of a member of parliament. He indicated that the country was suffering under a terrible burden of socialism just before the economy crumbled some years back. He spoke vehemently against trade policies which block exports from many nations. One of his statements, "...despite all the best intentions and all the political goodwill behind so much government intervention, much of it fails to deliver the benefits hoped for, and too often ends up standing in the way of our people achieving the things they've dreamed of.... I want to challenge my fellow politicians internationally. The protectionist policies of so many politicians in the developed world are a stain on the morality of the world." While we applaud his free trade sentiments, his collective guilt trip misses the mark.

Jim Peron gave a speech on "Libertopia." He criticizes the Free State Project, and argues for a free nation state project (for some reasons). Among other things, Peron suggests that a libertarian country "requires a geographical area that is small enough to influence, large enough to be economically viable, but one that also has political sovereignty." No new countries for Mr. Peron.

Peron's second speech on the true state of the third world was much more interesting. He suggested that hunger is routinely caused by bad economic policies, armed political conflicts (we use the shorter term "war") and tyrannical political leadership. His report included nes that the numbers of undernourished people in the world are down by 40 million from 1990, educational levels are up, infant mortality rates are down, lifespans are up, and incomes are up. We suspect the rise in incomes is the source of much of this good news.

Norman Laroque of the Education Forum spoke on the 160 million children worldwide by 2025 who are expected to have no access to primary education. This situation is a tremendous opportunity for private education, he suggests. The abysmal record of government schools has created additional demand.

Roger Kerr of the NZ Business Roundtable gave a presentation on the benefits of free market economics. He expressed concern that the current NZ government was regulating business too much and causing its economy to decline.

Another local speaker, Lance Kennedy, concerned himself with eco-myths. One of the most troubling is the myth of DDT. The pesticide DDT was banned due to hysteria caused by Rachel Carson in her book Silent Spring which used very weak evidence to claim that DDT killed wild birds by thinning egg shells and caused cancer in humans. Both claims have since been proven false. DDT does have the effect of killing the anopheles mosquito which spreads malaria. By 1964, malaria was nearly eradicated. Since then, thanks to vicious lying eco-socialists like Carson, close to sixty million people have died from the re-emergence of malaria due to the DDT ban.

Lindsay Mitchell, a research fellow at the Institute for Liberal Values of NZ gave a stunning indictment of welfare states around the world. Among the massive abuses, the state welfare systems nurture epidemic levels of child abuse, result in women living in violent relationships, wrecks lives and results in rampant alcoholism.

It grows late and we grow weary, so more on the international liberty news in next week's issue.


We concur with Paul Rubin's views that the current Vioxx scare, and its follow-on twin nightmares involving Celebrex and Aleve, may prompt legislators to adopt more dangerous pharmaceutical regulatory laws, or prompt regulators to more mindless policies. However, we don't agree with his conclusion that a new agency is desirable.

The history is very simple. In 1962, the FDA changed its policy requiring that drug companies prove that their drugs are effective as well as safe. Since that time, two enormous effects have occurred. First, we believe upwards of half a million people have died waiting for drugs which would have been available to them in a free market system. Second, the pharmaceutical manufacturers have been subsidized with a tremendous barrier to entry, essentially creating an oligopoly of firms able to pay the estimated $800 million per approved drug for effectiveness testing.

As in the aerospace industry where Burt Rutan laments that FAA certification would cost him $200 million for a suborbital spaceflight system that cost $30 million to develop, the key beneficiaries of regulation are those in the industry. New players are prevented from participating, or forced to sell their companies or their drugs to the existing players who can make the leap over the barriers to entry erected on their behalf. The enormous corporate welfare of these artificial and monstrous barriers to entry comes at a cost in economic terms, but a far more harrowing and debilitating cost in lives. People are dying, and Mr. Rubin, a former Chief Economist for the Consumer Product Safety Commission, wants another agency to detect and recall drugs discovered to be harmful.

We advocate a far more radical approach. No government agencies are needed. Return to the free market approach. Let those who fear new drugs set up testing laboratories and discover their efficacy. Who would fund such tests? Why, the trial lawyers who stand ready to sue everyone in sight at the drop of a hat. How would people know which drugs to trust? The free market has always stood ready to provide information, seals of approval such as those from Underwriters' Laboratory and Good Housekeeping, and consumer experiences.

We would go further. In addition to liquidating the assets of NASA and the FDA, we would run through alphabet city with a power mower and cast out every agency not specifically mentioned in the constitution, the amend the constitution to eliminate the issue power of money, all other economic powers, and eminent domain. To celebrate these accomplishments, we would send a team to Mount Rushmore to take Teddy Roosevelt and Abraham Lincoln away. The Lincoln Memorial would be sold to the highest bidder after that ungainly statue was destroyed.

But, keep in mind that larger than life statues of the hero worshipped leaders opposing individual liberty are throw down in the historical instances with which we are familiar by the violent overthrow of government, in the Soviet Union for example, or in Iraq last year (called "regime change" because "violent overthrow of government" is very conservative, but not neo-conservative.) As with all reform efforts, we expect no good results. Reform, as we've repeatedly said, is impossible in case of a system that is operating as designed. Nor is there any merit to revolution when there are so many places in the world now eager for freedom.

We wish the Americans would figure out what made their country great, and eliminate the negative. Here's a clue folks: it wasn't government that settled the West, educated the people, or built the railroads.

Publication note: Next week shall be our last issue for this year. We plan to password protect access to the 2005 directory for subscribers only. Also next week we anticipate building an index of some key terms we've discussed in this year's essays.


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