Archive for September, 2011

Whatever you may think you know or may ever hope to know, keep the following in mind: contradictions do not exist.  Most people, who exercise some capacity of rational thought, understand that absolute.  Just to be clear about reason; it is our metal faculty which takes our precepts and integrates that information within the entire context of our existing knowledge in a non-contradictory manner.  The issue is, however, when we think we’re facing a contradiction, our default assumption is to eliminate the new information — that is an error.

 Man is capable of error, so when facing a contradiction, wouldn’t it be prudent to challenge what you already know on a rational standard to see if you made an error?  What’s the worst that could happen?  You continue to revalidate your initial assumptions based on rational standards?  What’s the best that could happen?  You discover an error in your thinking and you correct it.  (The value in correcting one’s thinking should be plain).

 To guide your thinking, become familiar with the Laws of Thought: Law of Identity, Law of Excluded Middle, and Law of Non-Contradiction.  Why?  Most understand, at least implicitly, the Primacy of Existence; the next logical step is conforming your thoughts to Law of Identity — i.e., the Supremacy of Reason — the result being the elimination of any contradictions that may exist in your thinking.

 We know through observation, and the Law of Identity as applied to man, that man must use reason to survive — reason is man’s basic tool of survival qua man.  Man must create material values (route water, plant and grow food, build shelters, etc.) to survive; values do not preexist for him — he lacks claws for defense, fur or hide for warmth or protection, and preexisting knowledge to serve as instinct.  Any form of creation, from tools to a skyscraper, requires a process of thought – “what is it that I want to achieve, and how do I do it”? 

 In determining how do accomplish something, man must determine the identity of certain objects.  In something as simple as planting, for example, he has to understand that the identity of plants obligates certain requirements for the plant to flourish — the roots must be buried in dirt with plenty of nutrients, the leaves must have access to an adequate amount of photons, and the plant requires access to the right amount of water.  Man must discover how to accomplish these tasks and in what order.  None of this can be achieved by a process of non-thinking, and most importantly, none of his thinking can be effective unless he accurately identifies the facts of reality — i.e. he thinks rationally — and acts accordingly.

 In the spirit of rooting out contradictions, perhaps the most important historical tenant, that is taken as an absolute, which requires challenging on a rational standard, is the principle of otherism — i.e. altruism.  Why is altruism accepted without question?  Is it because altruism has no rational foundation?  Why is questioning altruism — i.e. using your rational faculty to challenge it — considered inhumane?  Isn’t rational thought, as we observed, necessarily a human requirement?  So, thought is obligatory in creating values, but the absence of thought is obligatory in how to dispose of those values? 

 And therein lays the contradiction: man’s identity obligates rational thought, while altruism (thus far) obligates its absence — how can it be obligatory to think and not to think?  If you wish to eliminate every contradiction in your thinking, then altruism either requires a rational foundation or it’s patently false.  Use this opportunity to start your rational journey into the field of ethics, root out the error, and eliminate the contradiction — whatever it may be. 

 Let’s hear what you discovered.  Does a rational foundation exist for altruism or is it doomed as irrational?  You might be wondering what could possibly replace altruism.  Catch a glimpse of it here.

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“But the theory that rights come from God is hopeless. To begin with, there is no evidence for the existence of such a being, much less for the existence of rights that somehow emanate from his will. Whether one believes in God is beside the point here. Either way, the fact remains that there is no evidence for God’s existence, which is why it is supposed to be accepted on faith—in the absence of evidence. Rights in support of which there is no evidence are not rights but fantasies…

“…To say that rights come from God is to say that there is no evidence in support of their existence, that there is no basis for them in perceptual reality, that they are not rationally provable. This is not a sound theory of rights; it cannot serve as a solid foundation on which to advocate or defend liberty…” [Continued]

“Altruism holds that being moral consists in self-sacrificially serving others. Despite its self-destructive nature, altruism is accepted to some extent by almost everyone today. Of course, no one upholds it consistently—at least not for long. Rather, most people accept it as true—and then cheat on it.

“All religionists—Christians, Jews, and Muslims—are altruists. Their holy books demand it. All so-called “Secular Humanists”—Utilitarians, Postmodernists, and Egalitarians—are altruists. Their philosophies demand it.

“From the Christian, Jewish, and Muslim points of view…” [Continued]

This choice has been offered: either sacrifice* others to yourself, or sacrifice yourself to others. Now, which will you choose as your moral purpose? Which is more noble? Clearly, sacrificing others to yourself comes with the implicit, distasteful understanding that fraud or force is necessary because no one in their right mind would knowingly and voluntarily do that. Altruism rests on this foundation — the alternative is worse.

Are the alternatives correct, though, or is it a false dichotomy? The choice as presented assumes that sacrifice is necessary. If you do not choose to sacrifice yourself to others, then you necessarily will be sacrificing others to yourself (or vice versa). But is that assumption correct? Is sacrifice a necessary part of the way men deal with one another? If not, does that suggest a third option: neither sacrificing yourself to others, nor others to yourself?

Changing tracks a bit, it stands to reason that life, in order to survive, feeds off of other life-forms — from herbivores that eat grass to carnivores that eat herbivores, and everything in-between. That is the nature of life and nothing less will sustain it. None of the rules of life are arbitrary or whimsical — it is the necessary consequence of one of the laws of nature: the law of identity — A is A. A life-form is a particular type of entity, with particular characteristics and requirements. If any life-form were to act against — i.e. contradict — its requirements, then it would die. If a plant were to strangle its roots and shun light, it would wither and die. If an herbivore were to refuse to consume plants, it would die. If a carnivore were to refuse to consume herbivores, it would die.

With that in mind, it would be an error to assume that men deal with one another in the same manner and under the same terms as animals deal with other classes of life-forms — by consuming them. True, men deal with other classes of life-forms in this regard, but there is a key attribute that men possess which makes their interaction with each other different from all the rest — their rational faculty.

Man’s mind allows him to produce the values, which his life requires. Man can organize plants in a manner which yields a thousand to a million times more produce than nature would otherwise produce. Man can organize animals in much the same way to create similar effects. Man can design and build machines to make his efforts ever more efficient. Man’s limit of achievement has continuously been broken by each new invention. Man, by his nature, is a producer of his own values. Where in any of this, is sacrifice necessary?

Since men are the creators of the objective values that man’s life requires, it is in man’s nature to deal with other men, not as exploiter or exploitee, but as traders. Each man possesses a value that they produced (with which they are willing to part) and trades it for another value (which they require more than the original) — both men gain objective value which supports both of their lives. Where in any of this, is sacrifice necessary?

Remember, “If any life-form were to act against — i.e. contradict — its requirements, then it would die.” To assume that sacrifice is necessary when dealing with one another is to assume that the only means to acquire values, which your life requires, is by expropriating them from others — this contradicts man’s requirement to produce and trade the objective values that his life requires. Figuring out how to grow food will sustain your life, killing others for the food they created will not — what will happen when you run out of victims? Trading values that you do not require for those that you do will sustain your life, killing others who possess the values you need will not — what will happen when you run out of victims? Those potential victims, if regarded as traders instead, can continue to produce the values you require, which will allow you the opportunity to trade (if you offer them a good value in return).

Since altruism’s foundation is based on the necessity of sacrifice, it too contradicts man’s requirements, and therefore, is a morality of death. What are those contradictions, you might ask. For starters, altruism is a contradiction in terms. Isn’t the person accepting the values, that you offer selflessly, selfish for accepting them? Selfishness goes against altruism and would be considered bad under those terms, right? Why would a moral standard require you to support its antithesis? Secondly, the nature of altruism contradicts man’s requirements. Don’t you require material values (food, water, cloths, shelter, etc.) to survive and live a fulfilling life? If you get those values from someone else, then according to the standard of altruism you’d be bad for being selfish, right? If you create them and consume them yourself, then according to altruism you’d be bad for not sharing, right?  In either case, according to altruism, you’re evil if you take steps to sustain your life.

Why would a moral standard, if practiced consistently, guide you to self-destruction? The fact that men are alive today means they’ve breached the morality of altruism to some degree — that leads to the perils of altruism: those who are noble die in its name and those who are alive owe their guilty lives to others.

The third option is far superior than the original two. It allows men to be set free from other men and allows them to live free on their own effort or any voluntary arrangements their hearts desire — all this is accomplished without sacrifice.

*Note: I suppose it would be prudent to clearly identify what I mean by sacrifice. It is a type of trade which exchanges something of higher value for something of lower value. A $1 bill in exchange for $100 bill is not a sacrifice — A $100 bill for $1 bill is. Going without food to feed your child is not a sacrifice — taking the food out of your child’s mouth for another’s child is.

 

(Note from author: I have recently been convinced that fractional-reserve banking, though it’s a bad idea, should not be outlawed.  The government should not outlaw bad ideas unless fraud or another for a violating rights is involved.)

The origination of the idea:

Where does the idea of fractional-reserve banking come from? The short answer is goldsmiths implemented the idea to depart from full-reserve banking. Back when gold and silver coins were the primary means of currency, goldsmiths kept deposits of gold in their safe for a small fee. In return the depositor would receive a receipt for the exact amount of their deposits. After a while, the receipts grew in popularity and were circulated just as much as the physical metals were themselves — after all, they were as good as gold. The deposits in the goldsmith’s safe were collecting dust and the smith realized that very few people came back to collect their deposits because they were using their receipts instead. The goldsmith would then lend out the deposited gold at interest while keeping some in reserve just in case someone returned for it. The depositors didn’t mind too much because they received their gold when requested (more or less) and because instead or paying for the storage fee, they would receive interest for their deposits; thus, the birth of the fractional-reserve banking process.

Money To Be Made With Little Risk:

Who is making the money? In short, the bankers are. They are earning interest on money that is not theirs. Getting back to our previous example, let’s say for the sake of argument that the bank makes 8% interest for money on loan and pays 3% interest for deposits. Given our example, there is $9000 loaned out and $10,000 in deposits—or $9000 loaned out, and $9000 + $1000 in deposits. To simplify, that means the bank is making 5% on $9000 (8% on $9000 — 3% on $9000) and paying 3% $1000. $9000 is $1000 times 9; so to simplify even further, that means the bank is making 45% (5% times 9) on $1000 and paying 3% on $1000. And to go the rest of the way, the bank is earning (when all is said and done) 42% (45% — 3%) on that original $1000, which was not originally theirs. There is a ton of money to be made off of money that doesn’t belong to you. Is this process sustainable?

The Sustainability Of This Contradiction:

Continuing with our example, one can see that eventually the bank will own at least $1000 on record—only about two iterations of interest payments is 86% of $1000. There is still $9,000 on record for loans and $10,000 for deposits. Ok let’s assume the bank makes $1000 and withdraws it out of the system (the most extreme scenario) and puts it into an off shore hedge fund leaving everyone else to pay back $9000 in loans with zero money available. This will create an infinite demand for money and no means to quench it. Or in the case of a bank run instead, where everyone pulls out at the same time leaving those last in line with lint in their pockets. The only result of either scenario is deflation (in this case by 10 times), leading to a depression.

Ok, this obviously cannot be sustained given my little example, but what about on the scale of an entire country (or the world)? Macroeconomic effects are made of microeconomic events; therefore, if something cannot work at the micro level, then how can it possibly work at the macro level? The answer is it can’t. The part cannot contradict the whole. The best you can hope for is to patch it up the best you can temporarily, and they do, until the system ultimately fails—like in 1929 or any end to any bubble.

This is an excellent video for those interested in an entertaining break down of the two economic/political ideologies at war in our country today, and has been going on for almost a century. The stakes are high.

(Note from author: I have recently been convinced that fractional-reserve banking, though it’s a bad idea, should not be outlawed.  The government should not outlaw bad ideas unless fraud or another for a violating rights is involved.)

 

The Basics:

Law of Identity: A is A

Law of Excluded Middle: Anything is either A or non-A

Law of Contradiction: Nothing can be both A and non-A at the same time in the same respect

Law of Causality: The relationship between cause and effect

The Problem:

Fractional-reserve banking is a fraudulent process because it violates the law of contradiction. Because it is a fraud it is incompatible with the free-market; therefore, free-market laws should prohibit such frauds and protect individuals from it. Our whole financial system, however, is designed around concealing that fact and it’s designed around sustaining its operation besides. The motive for maintaining this particular contradiction (as far as I can tell) is that there is a ton of money to be earned and because it’s lasted this long thus far (i.e., status quo). It will soon be coming to an end, as most contradictions eventually do, one way or another; either by choice or by the implacability of reality rearing its head — I sincerely hope for the former.

Why fractional-reserve banking is a fraud:

What is fractional-reserve banking? Fractional-reserve banking is what allows banks to lend part of its deposits (AKA assets) while maintaining a small fraction (in this example 10%) in reserve; thus, the term “fractional-reserve banking”. That doesn’t sound so bad, that is until one carries it out to its logical conclusion.

Let’s say for the sake of argument that only $1000 exists in circulation, only one bank exists, and there is only one depositor (so far) at this bank, who deposited the existing $1000. The bank can now lend $900 while maintaining $100 in reserve. That $900 gets spent and then deposited back into the bank. Because banks do not care about the source of their deposits, that $900 is counted as an asset. The bank can now lend 90% of $900 while maintaining 10% in reserve. That lent money gets spend, it’s deposited back into the bank, and it’s counted as an asset which the bank can now lend 90% of again. This cycle can continue until the very last penny. The result being that $1000 is in the reserve (the original $1000), $9000 is on the books as lent out, and $10,000 is on the books for deposits. That should raise a few eyebrows, but it gets worse.

Here in lies the contradiction; that $1000 is claimed to be owned by several people. People will spend their deposit as though they own it. People will assume that their money exists in full. Keep in mind that nothing can be A and non-A at the same time in the same respect – that would be a contradiction. In this case, that $1000 belongs to the first depositor and not to the first depositor at the same time in the same respect — that is a contradiction. Any one or all of its many owners may go the bank to claim “their” money — you better be the first one in line though because only $1000 exists.

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