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Catching a Falling Financial Knife

What the State Fears Most: Information

Politics / US Politics Dec 14, 2010 - 09:27 AM GMT

By: J_M_Finegold_Catalan

Politics

Best Financial Markets Analysis ArticleHistory tells a cyclical story of man versus state: man persistently creating new ideas and the state tirelessly laboring to destroy them. Bureaucracy has never been a friend to the ideas that undermine its artificial legitimacy.

All too often, history provides us with examples of state-enforced book burnings and other forms of extreme censorship. Many of us today take our so-called freedom of speech for granted, and few realize just how pervasive government censorship remains. It is true that not many of us living today in the industrially advanced world have experienced the worst kinds of censorship[1] — few have memories, for example, of the Nazi book burnings that took place throughout the 1930s, which claimed over 18,000 works.


By and large, efforts to censor were relatively successful until only very recently. Book burnings, especially in more modern times, failed to completely eliminate a book from worldwide circulation, but they most definitely limited circulation within the borders of the governments in question. How many copies of Human Action circulated within Nazi Germany between 1940 and 1945? I would venture to guess very few.

The battle has always been between the state and market, or man's ability to circumvent the tentacles of government through economic progress. Until only very recently, man has been at a technological disadvantage. The ability to evade book burnings amounted to the ability to hide the book. The end of censorship in Germany, for example, came only with the end of the Nazi regime.[2]

Presently, our ability to attain knowledge is threatened because said knowledge represents a threat to the state — not to "national security," as is claimed, but to the legitimacy of the state itself. Julian Assange, through WikiLeaks, has made available to society a vast collection of information that undermines the state's legitimacy. Assange cracked the government's veil of benignity and brought into question the state's tactics. His website undermines its moral authority.

The threat posed by Assange is underscored by the government's seemingly disproportionate response. Senator Joe Lieberman, chairman of the Senate Committee on Homeland Security and Governmental Affairs, successfully used the power of the state to shut down part of WikiLeaks.[3] He did so by threatening to sanction Amazon, which at the time hosted that part of Assange's operation.

Amazon's acquiescence to Lieberman's demand has brought about a round of recrimination. Most of those upset are justifiably angry at Lieberman, and some have even supported a boycott against Amazon proper (for collusion with the state) — showing that Amazon has more to lose by acting against the will of its customers than it has to gain from complying with government.[4]

Both sides of the debate may have merit. The purpose of the present essay lies elsewhere, however. There is something positive that both sides have neglected to take notice of — WikiLeaks won.

WikiLeaks was only shut down for one day. The service found a new host, outside the immediate reach of the American government. Bureaucracy has been stumped by a new obstacle that, ironically, it helped to create (although the market let it flourish) — the Internet. Now it is the state that finds itself one step behind. Book burning has been rendered obsolete.

The Internet knows no borders, jurisdictions, or physical limitations. A server in Nigeria can be accessed from the United States. One simply has to look at the number of pirating websites seemingly immune to intellectual-property laws. This global network of information dispersion has made irrelevant the state's tools of repression: How can a nation's costume-sporting thugs effectively stop something that does not physically exist within their geographic jurisdiction? How can a government threaten with regulation an entity that operates outside its ability to enforce its laws? The state has been left behind.

True, governments have had some success censoring the Internet through security blocks and similar tactics, but just how effective these means have been is up for scrutiny. Even China's vast army of "Internet police" has been ineffective at stopping the less technically challenged individuals from evading their firewalls.

"Bureaucracy has been stumped by a new obstacle — the Internet. Now it is the state that finds itself one step behind. Book burning has been rendered obsolete."

How many times has an individual brought about such a reaction to a blatant attack on the state? How many times has that individual gotten away with it? More importantly, how many times has the government responded with force and failed? The recent events illustrate that government is losing and the market is winning.

One hundred years ago, or even 40 or 50 years ago, such a tyrant as Lieberman would have most likely been a feared man in whatever country he could enforce his censorship. Today men like Lieberman are nearing irrelevancy. What greater satisfaction can there be than seeing a despot stripped of his power?

Some may fear that the uncontrollable nature of the Internet might stimulate more pervasive forms of government intervention and regulation. That is, that the Internet may force the state to grow at a faster pace than it already is. Perhaps an "Internet police" is in the United States' future (if it doesn't already exist).

I say bring it. It is worthwhile to consider the following passage from Ludwig von Mises's Human Action,

In the long run there is no such thing as an unpopular government. Civil war and revolution are the means by which the discontented majorities overthrow rulers and methods of government which do not suit them.[5]

What Mises meant is that government's legitimacy stems from the people it purports to rule. Government can survive only to the extent that it exists without creating overbearing costs for the citizenry it lives on. The nature of government as an ever-growing bureaucracy suggests its incompatibility with society, since government growth undermines its own authority. Thus, the faster it does this the better — and because the relevant growth will take place in an area that all Americans hold dear, it will make government's crookedness all the more obvious.

The revolution that Mises spoke of has been occurring since time immemorial — it is the perpetual clash between man and state. Historically, man has been limited by strength. A revolution could only succeed if it physically overpowered the state's thugs. Such means of revolution are beginning to be outmoded, because technological advances, such as the Internet, have made the state's thugs powerless.

We are above emulating the state's tactics. The role of ideas has become so comprehensive that even government-empowered gangsters are susceptible once they realize just how ridiculous they have been made to look.

Just how extensive or important the role of the Internet is in the fight against tyranny will be for the historian to tell. It might be the case that man has not yet developed the necessary tools to protect his interests against the hegemonic relationship he is forced to accept with the state. The purpose of this essay is not to exaggerate current events. It is meant to bear witness to how the rules are changing. In human history, the state has rarely failed in the short run in its endeavors to deprive its citizens of knowledge — and it has been the task of bloody revolution to spread this knowledge.

Bloody revolution is no longer with the times, because government's armies are becoming more and more immaterial. As this WikiLeaks episode unfolds, and as government sows the seeds of its own humiliation, we will see government combated, not by force of arms, but by the supremacy of the market.

Today we have seen bureaucracy in retreat. Once the state is fully denied the use of its force, through the market, we will witness a complete rout.

Notes
[1] This is a general observation, made mostly from an American perspective. Some industrially advanced nations did relatively recently experience extreme censorship. For example, Francisco Franco's authoritarian regime ended in Spain only 35 years ago.

[2] For East Germany, extreme censorship did not end until 1989.

[3] Rachel Sladja, "How Lieberman Got Amazon to Drop WikiLeaks," in Talking Points Memo.

[4] The anti-Amazon movement has received mixed reactions from the libertarian community (perhaps a sign of a lack of sufficient strength to make much of an impact). In support of the boycott, see Justin Raimondo, "Defend WikiLeaks — Boycott Amazon," and Eric Garris, "Boycott Amazon.com." In opposition, see Lew Rockwell, "Should We Boycott Amazon.com?," and Robert P. Murphy, "Some Concerns with the Amazon Boycott" and "Still Not Convinced on Amazon Boycott."

[5] Mises, Ludwig von (1998), Human Action (Auburn, Alabama: Ludwig von Mises Institute), pp. 149–50.

Jonathan Finegold Catalán is an economics and political science major at San Diego State University. He blogs at economicthought.net. Send him mail. See Jonathan M. Finegold Catalan's article archives.

© 2010 Copyright Ludwig von Mises - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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Catching a Falling Financial Knife