America by Any Other Name Would be as Free

Introduction

Americans are patriotic people.  Go to a ball game and watch in amazement as a strong, barrel-chested man transforms before your eyes and sheds a tear at the singing of his national anthem.  In a moment his joy turns to rage as he trounces some ungrateful punk that didn't remove his hat.  What exactly does he get so worked up about?  What is it about a flag or a song that can produce such zeal and emotional attachment?  The polls indicate that we think our government servants are nothing but crooks and liars, willing to slit their grandmother's throat for re-election.  So if it's not our government, what is there to love about America?

If Soviets parachuted in and took over the reigns of power à la Red Dawn this country would still have amber waves of grain and purple mountain majesties from sea to shining sea.  So what would change about America if the Red, White, and Blue was lowered and the Hammer, Sickle, and Star was raised in its place?  If Mt. Rushmore was demolished and the likeness of Marx, Lenin, Trotsky, and Stalin was sculpted over the rubble would this country stop being the greatest, freest, and we're-number-one-est country in the world?

Blasphemy!  Of course a communist invasion would mean the end of America!  The reds would take away all of the freedoms that make this country a great social democracy and the envy of the world.  Communism would destroy this country just like the USSR collapsed in 1991.

If only a communist invasion would be this obvious

So if the Soviets are a bad example, what about China?  They claim to be a communist country, but they seem to be doing pretty well.  It seems odd to bad-mouth a country when they are buying your debt and loaning the money you need to keep food on the table and the lights running.  So maybe the Soviet Union was just an example of a poorly managed communist country, and the Chinese have figured out how to do it right.  So re-imagine the picture, how would things change if the Chinese took over America as debt collectors during foreclosure and the Lincoln memorial was retrofitted with Chairman Mao Zedong overlooking the reflecting pool?

In other words, what does it mean to live in a communist country versus a western democracy?  And how would either of those forms of government compare to a fascist America?  Would everyone be goose-stepping and donning swastikas, but otherwise we would have business as normal?

Unfortunately, a successful communist or fascist takeover of America would not be so obvious.  We have to look beyond the superficial characteristics of Charlie Chaplin mustaches and Hammer and Sickle flags to get to the root of the ideology that inspires Communism and Fascism.

What could be more important than clearly identifying what made America great, and distinguishing it from what makes fascist and communist countries evil?  If you judge a tree by the fruit it bears, there is no questioning these moral judgments.  Something about America resulted in a unique historical event known as the industrial revolution where an explosion of innovation, technology, and wealth rose the standard of living of the common man to unimaginable heights and created the first middle class.  Compare that to the fruits of Nazi Germany, Soviet Russia or Maoist China and you find starvation, mass-murder, and concentration camps.

Since many countries enjoy just as much if not more natural resources than the United States, we can't attribute external factors like that to why one country becomes 1st world and another languishes in the 3rd world.  It must be the ideology, the principles upon which a government is architected that determine such things.  So let's compare and contrast these conflicting ideas of government and find out if America has remained true to her legacy or if we are witnessing a clandestine coup d'état.

Defining our terms: Government and lack thereof

Before I define the different systems of government, it's important to define government itself.  The great historian, economist, and libertarian philosopher Murray Rothbard said, "the State is the organization of robbery writ large." Harry Browne defined government as "an agency of coercion that's accepted as necessary by most people within its area of influence."  My definition is in alignment with these libertarian thinkers as well as President Barrack Obama, who said, "what essentially sets a nation-state apart [is] a monopoly on violence."

Government: an institution with a monopoly on violence within a territorial area.  The violence exercised by government agents generally includes theft, kidnapping, forced labor, and murder.

This definition might sound radical, but even the most ardent statist would have to admit it captures the essential feature of government.  Regardless of the ends of government, the means are always the same, and they require a monopoly on various forms of violence.  The ends could vary from a state run by angels that magically use their power of coercion to force people to be moral, to a night-watchman government that only exercises its power to stop and punish crime but otherwise leaves the people alone in a laissez-faire economy, to a robin-hood government that robs from the rich to give to the poor, or a 21st century example of a totalitarian nightmare government where psychopaths take over the machinery and erect concentration camps to plunder, torture, and murder the citizens trapped there.  Regardless of the extent or the directed aim that the violence is exercised, the fact remains that only a government exercises that violence with impunity.  If a government didn't have a monopoly on violence it would cease to be government and would become a private company offering legal or defense services, indistinguishable from any other voluntary company.

A society that has no institution with a monopoly on violence would be in a state of anarchy.  Anarchy is usually thought of as a Mad-Max nightmare world with no rule of law and criminals running wild.  To distinguish this undesirable scenario from a world where law and order is exercised by voluntary companies offering legal, defense, and insurance services Murray Rothbard coined the term anarcho-capitalism.

Anarcho-Capitalism: "Rule by No One"  No institution holds a monopoly on violence, nor the power to conscript, tax, or imprison.  Instead, sovereign men and women would assume full responsibility of protecting their natural rights and property, and would do so by forming voluntary companies offering legal and defense services.  Crime would be insured against just like any natural disaster, and private arbitration companies would focus on restitution rather than punishment.

Defining our terms: Forms of government

I have much in agreement with the above video, but I will offer my own definitions that slightly differ with those given and point out how rights, privileges, and property are viewed and respected under each system of government.

Monarchy / Dictatorship: "Rule by One"  The king, queen, or dictator is the sovereign and controls a monopoly on violence over his subjects.  The monarch owns all the property and has all of the rights within his kingdom.  The people that live within the kingdom are either subjects that willingly live there and are granted privileges, or are serfs that are owned as property and are tied to the land through feudalism or outright slavery.

Oligarchy: "Rule by the Few"  This is essentially the same as a monarchy, but the monopoly on violence is shared and executed through a ruling class of nobles.  The above video argues that a monarchy is always an oligarchy, as the king or queen usually rely on a set of nobles, and the dictator has his group of commissars, such that the monarch or dictator doesn't truly make decisions independently, but is merely the front-man for the ruling group he represents.  Both a monarchy and an oligarchy could take the form of a theocracy if the one or few that rule do so according to a religious doctrine.

Democracy is the theory that the common people know what they want, and deserve to get it good and hard  - H.L. Mencken

Democracy: "Rule by the People" / "Rule by the Majority"  The Anti-Federalists branch of the founding fathers often called democracy "The Tyranny of the Majority".  There are no unalienable rights or limitations to the political power in a democracy as everything is up for vote.  51% can vote to impose any law, steal any property, or murder any member of the 49%.  In Federalist #10 James Madison said,

"A pure democracy can admit no cure for the mischiefs of faction. A common passion or interest will be felt by a majority, and there is nothing to check the inducements to sacrifice the weaker party. Hence it is, that democracies have ever been found incompatible with personal security or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths. "

Republic: I am hesitant to use the definition "Rule by the Law" to describe a republic, because even a democracy will have laws, but a majority vote can change the law.  So how do you describe a government with laws that a majority vote cannot change to distinguish a republic from a democracy?  A republic means "the public thing", and it was from a footnote in Isabel Paterson's book The God of the Machine where I read this implication:

"A Republic signifies an organization dealing with affairs which concern the public, thus implying that there are also private affairs, a sphere of social and personal life, with which government is not and should not be concerned; it sets a limit to the political power."

Thus, Benjamin Franklin exited the Constitutional Convention proclaiming the new government as a republic and not a democracy.  The constitution was sold to the states with the understanding that the federal government only had the powers expressly delegated to it, with all other powers belonging to the states and the people.  Though even this was not enough to earn ratification, requiring a Bill of Rights specifying some of the natural, unalienable rights of individuals that no constitutional law could violate.  This understanding of the Constitution clearly set boundaries which the government could not cross, making some things off-limit to majority vote, and differentiating it from a democracy.

Therefore, I would propose that a republic as understood above could be simply defined as "Rule by the Individual".  In a republic the individual is sovereign and has natural, unalienable rights.  The sovereign individuals grant privileges to government servants, who have a duty to exercise limited powers authorized by the people, among those powers being a monopoly on violence to punish and seek restitution for crime against persons and property.  The republican government will have a constitution that strictly limits the powers the public servants can carry out, and provides checks and balances to ensure that the people can reign in a public servant that oversteps his authority.  Thus, a republic would strive to achieve the goals advanced in the Declaration of Independence to form a government for the purpose of protecting individual rights and deriving its powers from the consent of the governed.

Socialism: The Socialist Party advocates a society where "working people own and control the means of production and distribution through democratically controlled public agencies" and claims that "socialism and democracy are one and indivisible."  Wikipedia describes socialism as common ownership and cooperative control of the means of production.  Hence, socialism is a form of democracy, "Rule by the People", that makes no attempt at pretending to honor the rights of the individual, but straight-forwardly advocates using government's monopoly on violence to take control over the productive property.

I view socialism not just as a potential manifestation of democracy, but the inevitable path all democracies will take.  Consider the famous quote attributed to Alexander Tytler and Lord Thomas MacCauley,

"A democracy cannot survive as a permanent form of government.  It can last only until its citizens discover that they can vote themselves largesse from the public treasury."

Thus, the point that the citizens in a democracy make the inevitable discovery of using the majority vote to loot the productive property from the minority is when the government becomes socialist.  This is shown in both theory and history.  Modern socialist governments do not attempt to actually own and control the "means of production" but instead implement redistribution schemes and welfare states.  They do not attempt to "collectively run" the productive property from lack of trying, but because it is impossible to make economic decisions without market prices, as Ludwig von Mises first pointed out.

Communism: While Wikipedia also defines one of communism's aims as "common ownership of the means of production", I use the 10 planks of the Communist Manifesto to differentiate socialism from communism.  The ten planks describe the means of achieving the goal of communism, "a stateless and classless society" through the abolition of all private property.  Communism, therefore, does not differ from socialism in principle, but only in the extreme with which it is practiced.  While communism does not praise the democratic process, it would share the key characteristics of a democracy, in that there are no individual rights and no limitation to the political power.

Fascism:  Fascism shares the same key characteristics as 5 of the 6 other forms of government defined above, in that the unalienable rights of the individual are not recognized.  However, while the abolition of individual rights may be an unpleasant side-effect necessary for the "higher goals" advanced by socialism or communism, fascism boldly and unapologetically proclaims that individual rights are nothing compared to the glory of the nation-state.  Lew Rockwell gave a trenchant definition of fascism in his essay The Fascist Threat:

"Fascism is the system of government that cartelizes the private sector, centrally plans the economy to subsidize producers, exalts the police State as the source of order, denies fundamental rights and liberties to individuals, and makes the executive State the unlimited master of society."

The term fascism was coined by Benito Mussolini, and he is commonly quoted as saying, "Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power."  While that exact quote is disputed, the sprit of this definition is confirmed in the work "The Doctrine of Fascism":

"The corporate State considers that private enterprise in the sphere of production is the most effective and useful instrument in the interest of the nation.  In view of the fact that private organisation of production is a function of national concern, the organiser of the enterprise is responsible to the State for the direction given to production.

State intervention in economic production arises only when private initiative is lacking or insufficient, or when the political interests of the State are involved. This intervention may take the form of control, assistance or direct management."

Fascism is popularly characterized as a "far-right" government in opposition to socialism or communism, who occupy the "far-left" side of the left-right political spectrum.  I maintain that the differences between these systems of government are only superficial and the heart of the divide is predicated on the supposed difference between ownership and control.  While the socialist wants the government to outright own the means of production, the fascist claims to recognize that private property is the necessary condition of production, but the "owner" must answer to the direction given by the state.  A proper understanding of rights and privileges dispels this error, as the owner of property has all the rights and decision making power associated with it, and therefore an "owner" of a factory who must comply with every edict and command of the state is no owner at all.  In that case the state is the true owner, and the supposed private owner is merely a manager for the state.

By understanding that a government that owns the means of production is fundamentally identical to one that controls the means of production, and disregarding the racial characteristic of fascism's most notorious example, we see that fascism shares the same principles of socialism, it's supposed antithesis.

Left-Right paradigm or Individualism vs. Collectivism

The above diagram shows the traditional left-right political spectrum, where the rational and safe place to be is right in the middle between modern liberalism and modern conservatism, or as Tom Woods would say, the political continuum from Hillary Clinton to Mitt Romney.  Anything more to the right of the Republican Party puts you in league with Nazi's and fascists, and anything more to the left of the Democrat Party allies you with commies and bomb-throwing anarchists.  Ironically, anyone that holds positions outside of this narrow spectrum of thought, for example, a principled natural-rights based libertarian, finds himself accused of being "far-left" when the Red Team is in charge under Bush, but then becomes a member of the "far-right" when the Blue Team regains control under Obama.

Theses terms originate from pre-revolutionary France, where the revolutionaries that wanted to limit the existing government, in those days called liberals, sat to the left of the king in the National Assembly, and the nobility who wished to conserve the status quo sat to the right of the king.  From this trivial designation of where 18th century Frenchmen sat in comparison to their king comes this unhelpful, misleading left-right political spectrum.  Hence, we hear that fascists are the opposite of communists because they are on opposite sides of this political spectrum.  Other confusions that arise from this diagram include the idea that a Democrat controlled government could never implement fascist policies, and a Republican government could never implement socialist or communist policies, as again, they are on the wrong side of the spectrum.

Thankfully, the left-right spectrum is not the only diagram we have to make sense of the different forms of government and how they compare and contrast to each other.  The late David Nolan, one of the founders of the Libertarian Party, created the Nolan Chart to add another dimension to the left-right spectrum.  For this chart, the horizontal or x-axis represents economic freedom, and the vertical or y-axis measures personal freedom.  While there are exceptions to the rule, we generally see the Republican party favors policies more in line with economic freedom such as lower taxes but opposes personal freedoms such as drug legalization and abortion, while the Democrat party generally champions personal freedoms but is in favor of heavy taxation and regulations on business.

Rotating the Nolan Chart 45 degrees and re-plotting the familiar logos from the left-right spectrum yields the following diagram.  Here we find modern liberalism and modern conservatism in their familiar places on the left and right, but without the confusions that arise from forcing other forms of government on that one-dimensional line.  While there are good reasons to question if monarchy would be relatively better than democracy in protecting individual rights (see Democracy: The God that Failed), the other major forms of government fall orderly and logically. We see that both Communism and Fascism are at the bottom of the diamond, as both deny economic and personal liberty, while libertarianism and anarcho-capitalism are at the top for championing natural rights, which include personal and economic liberty.

To paint broad strokes on this diagram, we can characterize the top triangle as forms of individualism, with the bottom half compromising governments based on collectivism.  Individualism is a philosophy that stresses the primacy and moral worth of the individual, and a government based on this philosophy would have as its only purpose the protection of individual rights and property.  A libertarian government that promotes "Maximum Freedom, Minimum Government" or a republic as defined above would resemble a night-watchman that uses its monopoly on violence to tax the citizens to provide police and courts to protect them from all forms of assault, theft, and fraud, but otherwise leaves the people with a free-market economy.  Anarcho-capitalism is the epitome of individualism, as not even defense and legal services can justify taxation under this form of non-government.  The anarcho-capitalist philosophy acknowledge the natural rights of the individual, and leaves it to them to form private and completely voluntary legal and defense companies as they see fit, and would not allow for anyone to be forced into this system against their will, even if "it's for their own good".

Collectivism is a philosophy that stresses the group over the individual, where the total is more than the sum of its parts.  Collectivists can focus on the majority, the community, the society, or the nation as the focus of government power, and its common slogan is "the greatest good for the greatest number."   Once that proposition is accepted, it is up to the government officials to decide just what that means, and exercise their monopoly on violence to achieve their ends accordingly.

In a democracy the majority vote is the mechanism to determine the greater good, and all individual rights are at the mercy of the 51%.  Under socialism or communism the society or community is the greater good, and all individual rights must give way, whether it is the farmer forced into collectivization or the bourgeois factory owner forced into contracts and regulations.  The fascist government is the epitome of collectivism, as the nation is exalted as the highest possible good.  The fascist Nation State is an "ethical reality which exists and lives", and the expanding empire is "an essential manifestation of vitality".

Whatever excuse the collectivist uses, the end result is the denial of individual rights, and while the tactics of the individualist my differ, his primary goal is the protection of individual rights.  I find this dichotomy to be far more honest and effective in differentiating different forms of government then the traditional left-right paradigm.

America: from Freedom to Fascism and everything in between

Now that we have defined government and its various forms, and categorized these government systems as they are either based on the philosophies of individualism or collectivism, we are ready to document America's journey through her various experiments in government.  Along the way we will want to remember the questions introduced at the introduction of this blog: What made America great, What form of government did the "founding fathers" leave us, and What form of government do we have today?

America's foundation in Communism

As I first learned in Thomas DiLorenzo's book How Capitalism Saved America, the first American settlers originally adopted communal ownership of land and property.  If there was ever an opportunity to confirm or refute the communist experiment, this was it.  Following the doctrine "from each according to his ability, to each according to his need", all that the colonists produced was to go into a common pool to be used to support the colony.  What was the result?

For the first Americans settling Jamestown in the Virginia Tidewater region in May 1607, DiLorenzo reports,

"they found incredibly fertile soil and a cornucopia of seafood, wild game such as deer and turkey, and fruits of all kinds.  Nevertheless, within six months, all but 38 of the original 104 Jamestown settlers were dead, most having succumbed to famine. … Two years later, the Virginia Company sent 500 more "recruits" to settle in Virginia, and within six months a staggering 440 were dead by starvation and disease."

In 1611 the British government sent Sir Thomas Dale to serve as high marshal of the Virginia colony, where he identified the cause of the problems as the system of communal ownership.  He scrapped the old system and instituted new reforms where each man in the colony was given 3 acres of private property and only had to contribute 1 month per year to the colony treasury.  DiLorenzo writes,

"Private property was thus put into place, and the colony immediately began to prosper.  There was no more free riding, for each individual himself bore the full consequences of any reductions in output.  At the same time, the individual had an incentive to increase his effort because he directly benefited from his own labor."

In 1620 the Mayflower expedition arrived in Cape Cod and made the same tragic mistake, where common property ownership left half of the original colonists dead within a few months.  The chief Mayflower investor, Thomas Weston, arrived to examine "the ruin and dissolution of his colony" and arrived at the same conclusion as Sir Thomas Dale.  After instituting private property he happily reported, "This had very good success, for it made all hands very industrious… The women now went willingly into the field, and took their little ones with them to set corn."

The Theocratic rule of the British colonies

Fast forward 30-40 years, and we find that some of the British colonies instituted a theocratic government just as oppressive as those the colonists originally fled from.  As I learned in Murray Rothbard's Conceived in Liberty Vol I, one of the most oppressive colonies was the Puritan rule in Massachusetts Bay.  The first compulsory education law in America was implemented here in 1642, with the purpose of indoctrinating the younger generation in Puritan orthodoxy.  The school master was supported by the town government, and a 1654 law made it illegal to employ any teachers that "manifested themselves unsound in the faith or scandalous in their lives."

Under Puritan rule any worldly pleasures on the Sabbath were a crime against both church and state.  In the 1650's the general court passed a law prohibiting the crimes of "playing, uncivil walking, and drinking and traveling from town to town" on Sunday.  If one could not pay the fine for this grave offense, the criminal was whipped by the constable at the maximum rate of five lashes per ten-shilling fine.

Other Sunday crimes included kissing one's wife in public, failing to attend a Puritan church, or upon following the compulsory church attendance law, falling asleep in church!  There were also many laws passed against women such as outlawing apparel like short sleeve dresses that exposed the naked arm, or even just clothing that was too nice and indicated the "pride of raiment."

Unfortunately, the oligarchic and theocratic governments of these colonies could be so oppressive that many colonists pleaded to the King to enforce their rights as Englishmen and protect them from Puritan rule.  The memory resulted in many supporting the King and joining the Tories in the upcoming American revolution.

Anarcho-Capitalism kick-starts the revolution

Moving on to Volumes III and IV of Rothbard's treatise Conceived in Liberty, we arrive on September 5, 1774 at the meeting of the first Continental Congress.  The official call for the first Congress was made the previous June by the Massachusetts Assembly, which was one of the revolutionary parallel institutions of quasi-government that answered Sam Adam's call to, "let associations and combinations be everywhere set up to consult and recover our just rights."  The various committees from the colonies wanted to unite in their opposition against the 'Intolerable Acts' through boycotts and other actions against Great Britain.  Foreshadowing America's future intellectual battles between her radicals and conservatives, the first Congress contained two factions; one wanted to address grievances within the confines of the British Constitution and their rights as Englishmen, and another sought a hard-core natural rights approach to deny the authority of Parliament.

The battles at Lexington and Concord fought by volunteer militia who elected their own officers.

While the Continental Congress did make compromises to satisfy the conservative branch, it should be noted how revolutionary the Congress was as a whole.  Here we have citizens acting not through their authorities in Parliament, but spontaneously creating their own organizations of local authority and making demands and issuing orders in defiance of their official government.  At this point, however, the Continental Congress could not be thought of as a government, because everything it did was voluntary and lacked a government's characteristic monopoly on violence.  The call to boycott and its local enforcement was done completely voluntarily, the second provincial congress of Massachusetts refused to levy taxes, but instead recommended a payment to the revolutionary institutions, and when the Committee of Safety made the call to raise an army it did so completely through volunteers and voluntary contributions, with the minutemen having the power of freely electing their own officers.

Rothbard quotes John Adams as witnessing this radical development and seeing " a great Province governed not by police and penalty but by, as it were, two hundred and sixty volunteer consciences."

It was these anarchistic institutions, lacking the coercive powers of taxing or conscripting militia, that nonetheless fought the British at Lexington and Concord and won great victories with volunteer militia that eventually defeated the greatest army in the world.

The Constitution gives a Republic, if you can keep it

After 10 years of operating under the Articles of Confederation the Hamiltonians had enough, the central government was far too weak.  The federal government could only request money from the states, it had no powers to tax the people directly, and that obstacle put a halt to any ambitious designs for an American empire.  Under the guise of amending the Articles of Confederation to enhance its taxing power the delegates instead launched a campaign to scrap the Articles and set up a completely new government.  Hamilton and his cronies openly supported a nationalist government where the president would be like a King, holding term for life along with a permanent senate, appointing governors with the power to override state legislature, and generally having powers suitable for a Monarch.

However, the people did not want a strong national government like the one they had just defeated.  "Nationalism", or a government with a strong executive, was very different from the "federalism" the people enjoyed where an alliance of sovereign, independent states were joined under the Articles of Confederation.  When the delegates to the 1787 Constitutional Convention returned with the proposed constitution, they brought them a document setting up a national government, but they made things optimally confusing by calling themselves federalists, and any that opposed them anti-federalists.

The Constitution: a Trojan horse for big government

The Anti-Federalists wrote against adopting the constitution, warning of the vague language and potential for trouble contained in the general welfare clause, the necessary and proper clause, and the interstate commerce clause.  The federalists responded that their fears were unfounded, the necessary and proper clause only applied to the seventeen explicitly delegated powers listed in Article 1, Section 8.  Unmoved by these explanations, the states demanded an explicit bill of rights documenting some of the individual, natural rights that this new government could never violate, as well as the most important amendments from the Jeffersonian perspective, the ninth and tenth, which proclaimed that there are many other rights not enumerated that are still retained by the people, and that all powers not delegated to the national government and not prohibited from the States belong to the States and the people.

This strict, literal interpretation of the Constitution promoted by the Federalists and understood by the delegates that ratified it did not last long.  After the Constitution was ratified Hamilton conveniently came upon a new understanding of the document.  Though he argued in the Federalist Papers that the only powers belonging to the national government were the seventeen explicitly delegated powers in Article 1, Section 8, as Secretary of Treasury under George Washington he argued that the Constitution in fact gave the national government powers both explicit and implicit, and thus he argued for the constitutionality of a central bank.

Benjamin Franklin's words "A republic… if you can keep it" now contain a cryptic meaning.  If the constitution could not retain its literal interpretation within years of its ratification from Hamilton's dishonest and lawyerly tricks, then the passage of time and the corruption of the English language would surely mean the end of federalism.

Lincoln, "The Great Dictator"

One of the most iconoclastic and paradigm-changing books I've read is Thomas DiLorenzo's The Real Lincoln.  The radical information in this book can be split between deconstructing two great myths, the means and the ends for which Lincoln waged the Civil War.  DiLorenzo sums up the means employed by Lincoln here:

"Even though the majority of Americans, North and South, believed in a right of secession as of 1861, upon taking office Lincoln implemented a series of unconstitutional acts, including launching an invasion of the South without consulting Congress, as required by the Constitution; declaring martial law; blockading the Southern ports; suspending the writ of habeas corpus for the duration of his administration; imprisoning without trial thousands of Northern citizens; arresting and imprisoning newspaper publishers who were critical of him; censoring all telegraph communication; nationalizing the railroads; creating several new states without the consent of the citizens of those states; ordering Federal troops to interfere with elections in the North by intimidating Democratic voters; deporting a member of Congress, Clement L. Vallandigham of Ohio, for criticizing the administration's income tax proposal at a Democratic Party rally; confiscating private property, confiscating firearms in violation of the Second Amendment; and effectively gutting the Ninth and Tenth Amendments to the Constitution, among other things."

These charges are indisputable, and mainstream historians will argue that the ends of abolishing slavery justified the extraordinary measures taken by Lincoln, thus calling him "The Great Dictator".  The problem with this view is addressed in the other categorical half of DiLorenzo's book, which shows that the civil war was not waged over the issue of slavery, but was instead fought over economic questions like tariffs on manufactured goods that benefited the North at the expense of the South.  Some of the most convincing evidence presented were the many quotes by Lincoln where he endorsed such racist ideas as sending the slaves back to Africa and making the new western-most states for whites only, quotes of him saying that he would free all the slaves or free none of the slaves as long as the union was preserved, and the historical fact that the emancipation proclamation specifically applied only to those states which were "in rebellion", exempting union controlled slave holding states such as Maryland, Kentucky, and West Virginia.

Thus it was Lincoln who forever changed our country's grammatical identity.  Before the War of Southern Independence, one would say "the United States are…" to describe the group of sovereign, independent States that make up "The United States of America."  After the War of Northern Aggression we say "the United States is…" to describe the Union, that thing which is greater than the sum of its parts, this strange form of contract with which one can join but can never leave.

Every time another unconstitutional law is passed or a civil liberty is violated, our representatives hold out Lincoln as the "ends justify the means" example of the one who was willing to do the "hard things" when the country needed it.  But we now see this comparison as false on two fronts.  It was unconstitutional for the Congress of 1798 to pass the Alien and Sedition Acts, as it was for Lincoln to arrest northern citizens and newspaper publishers, as it was to imprison Japanese-Americans during World War II, as is the detention without trial of suspects at Guantanamo Bay.  These acts were always unconstitutional, but it was Lincoln that "proved" he was right by launching a war that killed half a million Americans, paving the way for future transgressions against the American people.  If a military dictatorship ever firmly establishes itself here, Lincoln will be its charter member and guiding spirit.

Fighting the Great War to make the world "Safe for Democracy"

Woodrow Wilson was re-elected in 1916 because "he kept us out of war", and he turned his campaign platform on its head in 1917 when he proclaimed American entrance into World War I to make the world "safe for democracy."  In the introduction to his book Democracy: The God that Failed, Hans-Herman Hoppe draws a distinct line between previous wars that were primarily territorial disputes fought by professional armies for limited goals and this new form of grand ideological war with the supposed goal of making the world safe for democracy.  Hoppe states:

"When in March 1917 the US-allied Czar Nicholas II was forced to abdicate and a new democratic-republican government was established in Russia under Kerensky, Wilson was elated.  With the Czar gone, the war had finally become a purely ideological conflict: of good against evil.
...
As an increasingly ideologically motivated conflict, the war quickly degenerated into a total war …. The time-honored distinction between combatants and noncombatants and military and civilian life fell by the wayside.  For this reason, World War I resulted in many more civilian casualties - victims of starvation and disease - than of soldiers killed on the battlefields.  Moreover, due to the ideological character of the war, at its end no compromise peace but only total surrender, humiliation, and punishment was possible."

This marks the last time that America gave any pretension to maintaining a Republic.  From then on the American psyche was married to the idea of protecting democracies, both abroad and at home.  Tyranny of the majority?  Mob-rule?  Two wolves and a sheep arguing on what's for dinner?  The American people will have none of it.  From this point on we'll wage any war, bomb any civilian city, and invade any country to protect or impose our supposed democracy.

Meanwhile Wilson introduces Communism at home

Many odious laws were passed during Wilson's terms that fundamentally altered the architecture of our government and even shaped the American culture.  The seventeenth amendment annihilated states rights by making the Senate no longer ambassadors of the states who could be recalled by their state legislatures for bad behavior, but now another directly elected legislature, different from the Congress only in their number and term length.  However, the biggest changes he oversaw did not even come with an amendment to the Constitution.  In 1914 he maneuvered three major pieces of legislation through Congress.  Complementing the sixteenth amendment allegedly ratified the previous year, the first piece of legislation was a lower tariff, the Underwood Act, which had a graduated Federal income tax attached to it.  He also saw the passage of the Federal Reserve Act, undoing the hard work of bank-fighting president's Jefferson and Jackson.  Finally, he put through antitrust legislation to establish the Federal Trade Commission to prohibit "unfair business practices" through its authority in the constitution's interstate commerce clause.

If one understands communism through the lens of the ten planks of the communist manifesto, it appears that Wilson was hell bent on re-establishing the form of government that the first American pilgrims rightly abandoned 200 years earlier.  With the first plank describing the goal of communism, the abolition of private property, planks two through ten describe the methods and requisites of how to get there.

The second plank is a heavy progressive or graduated income tax, which had been unsuccessfully passed as law in previous administrations and ruled as unconstitutional.  The third plank is the abolition of all rights of inheritance, which corresponded to the Federal & State estate tax passed in 1916.  The fifth plank is the centralization of credit in the hands of the state by means of a national bank with state capital and an exclusive monopoly, achieved by the Federal Reserve.  1916 also saw the establishment of the department of labor, the federal highway act, and laws outlawing child labor, corresponding to the sixth, eighth, and tenth planks.

Of all these changes, the impact caused by the federal income tax cannot be overstated.  It snuck through under the guise of a measly 1% that applied only to the richest of the rich.  Now it generally takes a third of all the fruits of ones labor, offering a reverse incentive that the harder one works and the more one gains, the more the state will take as its share.  The magnitude of this change through the loss of capital that was never accumulated and the loss of jobs that were never created because the profits would have been stolen by the government cannot be measured.

Will we ever see the Hammer, Sickle and Star fly over the White House?  What does it matter beyond a ceremonial acknowledgement if the ideas that flag represents have infested and grown throughout the nation's infrastructure for the last 100 years?

FDR offers a New Deal in Fascism

Wolfgang Schivelbusch wrote a book called Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany, 1933-1939.  In this work he looks at the similarities between these three regimes, from their initial mutual praise for each other, to the shared elements in their "new deals" in their architecture style, enforcement methods, and public works projects.

Not only did the Nazi's praise "Roosevelt's adoption of National Socialist strains of thought in his economic and social policies", but FDR returned the compliment in a letter to ambassador William Dodd, saying that, "the virtue of duty, readiness for sacrifice, and discipline should dominate the entire people.  These moral demands which the President places before every individual citizen of the United States are also the quintessence of the German state philosophy, which finds its expression in the slogan "The Public Weal Transcends the Interest of the Individual.""

There was also mutual praise between FDR's New Deal and Mussolini's Fascist Italy.  Mussolini wrote an approving review of Roosevelt's Looking Forward, saying that Roosevelt's calls to battle are "reminiscent of the ways and means by which Fascism awakened the Italian people", further, "reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices, having recognized that the welfare of the economy is identical with the welfare of the people."  Mussolini also reviewed FDR's secretary of Agriculture's book New Frontiers, saying "Where is America headed?  This book leaves no doubt that it is on the road to corporatism, the economic system of the current century."

The mutual kudos between these regimes highlight the reality that all three embodied the definition of fascism as defined above.  Roosevelt's National Industrial Recovery Act is the most obvious, as it required American businessmen to form cartels that would set prices for its members.  While they were supposed to be voluntary, the "Blue Eagle" campaign and its government instigated boycotts ensured compliance.  From the NRA to Social Security, the theme of the new deal was to take control away from the "free-market, i.e., anarchistic economy" to the centrally controlled, cartelized, "corporativistic" economy, and this radical shift established our current system of the modern welfare state and the regulated economy.

Schivelbusch stresses that he does not think these comparisons warrant calling FDR's programs fascist, as they never resulted in the loss of civil liberties and the atrocities associated with other fascist regimes.  But he confuses the action with the reaction.  Just as inflation has been re-defined as rising prices instead of the classical definition of an increase in the money supply, with rising prices being the inevitable consequence, Schivelbusch doesn't see fascism until you find concentration camps.  Instead, he should recognize fascism as the political-economic system described above, and the loss of civil liberties, wars, and civilian deaths as the inevitable consequence that goes to the extent of the implementation of fascist policies.  The reason wars and concentration camps tend to arrive after fascist economic policies is the same reason that there can be no advanced socialist economy: without market prices no rational economic decisions can be made.  The market price of a good is the voluntarily arrived place where the forces of supply and demand meet, and any attempt to set the price above or below that market price with the use of force will result in surpluses or shortages.  The fascist government, implementing economic controls and causing surpluses of goods the people do not want and shortages of their most basic necessities, must create a scapegoat to prevent the citizens from recognizing the cause of their problems and reacting accordingly.  Thus, the fascist government will initiate wars with foreign countries, or declare war on a convenient minority of it's own citizens to blame them for the economic conditions that their fascist policies caused.

The incremental march to scientific dictatorship

In the height of the 2008 economic depression, a woman is arrested in a sting operation for operating a taxi without a license.  In 2011 federal SWAT teams nationwide crack down on criminals and terrorist sympathizers engage in the activity of… selling and consuming raw milk.  Meanwhile, the war on neighborhood lemonade stands continues heroically onward.

When we suffer, or are exposed to the same miseries by a government, which  we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer.  -Thomas Paine

How did we get here?  The red team under Bush passes laws like the Patriot Act and the blue team yells Fascist!  The big-government baton changes hands as Obama takes charge of the blue team and implements sweeping changes that make the Tea Partiers cry Socialist!  They're both right.  One team pushes on your economic liberties and calls you a racist if you resist, the other team pushes back on your personal liberties and threatens you with boogeymen and hobgoblins under your bed.

As long as the American worldview only goes back 4 to 8 years, we'll never diagnose the source of our problems.  Just as the disease must be correctly diagnosed before the correct medicine can be prescribed, we must recognize the source of our national prosperity as the mechanisms of our government aligned with the principle of individualism, and root out the disease of collectivism whether it's manifestations come from the latest administration, from a presidency a century ago, or from defects or dishonest interpretations of the constitution itself.

Conclusion

"A rose by any other name would smell as sweet" is a quote from Shakespeare's Romeo and Juliet, meaning that the names of things do not matter, only what they are.  In this spirit I ask, what is America?  If it is more than geographic boundaries, more than sentimental attachment to a song or a symbol, then what is it?  America is what it is because of its legacy of a revolution based on natural rights and a individualist philosophy.  Whether the constitution was an honest mistake or a hologram of liberty, it still contains components of the individualist revolution found through a strict interpretation of that document with an emphasis on the ninth and tenth amendments.  If we accept a government that completely disregards the constitution, the last ties we have to individualism, and endorse a collectivist government with flavors of socialism, communism, and fascism, then do we still live in America?

Rights, Privileges, and Property

Introduction

Good fences make good neighbors

If you've seen a debate between people with different political beliefs that talk past each other such that the exchange of ideas goes nowhere you have to wonder, why does this happen?  Do not both people want the same thing?  Isn't a common trait of man that we all want peace and prosperity in our lives, a higher standard of living, and to pass on a better world for our children?  How then do we explain that two good-hearted people can almost come to blows over a heated political discussion?  While the reason might be attributed to a difference of opinion in economics, religion, or ethical first principles, a strong cause is the lack of common definitions in terminology.

This problem is especially prevalent when it comes to the idea of rights.  Besides the hardened criminal, who would want to trample on another man's rights?  But in order to avoid violating the rights of another, we must first come to a common understanding of what rights are.  We have a system of government ostensibly purposed with protecting the rights of the individual, yet over time the word has become so muddled and used so loosely that any action or inaction could be construed to violate or deny someone's rights, and our court system overflowing with frivolous lawsuits certainly attests to this.

Taking examples from the United States Bill of Rights, FDR's Second Bill of Rights, the United Nation's Universal Declaration of Human Rights, and from the front pages of today's newspapers, we see that there has been a clear change as to what a right meant at the time of the country's founding and what it means today:

All three refer to rights, but one of these things is not like the others.

Individual rights, group rights, collective bargaining rights, the right to a living wage, civil rights, the right of association, the right to refuse service to anyone, the right to own property alone as well as in association with others, the right to a useful and remunerative job in the industries or shops or farms or mines of the nation, the right to adequate medical care, patient rights, the right to life, the right to liberty, the right to the pursuit of happiness, states rights, the divine right of kings, Miranda rights, the right to remain silent, the right to free speech, the right to freedom of thought, conscience and religion, the right to earn enough to provide adequate food and clothing and recreation, women's rights, reproductive rights, the right to marry and found a family, disability rights, the right to social security, the right to rest and leisure, the right of every family to a decent home, the right to be free from unreasonable searches and seizures, the right to security, the right of self-defense, the right to bear arms, the right to refuse to kill, the right to welfare, the right to a good education, the right to due process of law, the right to not be held in slavery or servitude, consumer rights, the right to travel, the right of the press, the right to adequate protection from the economic fears of old age, sickness, accident, and unemployment, and the right of the people peaceably to assemble and to petition the Government for a redress of grievances.

How can we reconcile these different examples of rights and come to a common, universally applicable definition when close inspection confirms that many of these are incompatible with one another?

Does the right to associate not imply the right to not associate?  How can a restaurant owner hang a sign that says "We reserve the right to refuse service to anyone" if that violates the civil rights of another?  Is a man's home his castle, but his business is subject to any regulation the government decides to pass?  Does the African-American or Jewish store owner have the right to refuse service to the skin-head KKK member, and if not, then can someone, presumably a government agent, force the minority store owner to serve the racist customer?  What if it's the other way around?

How can one have a right to specific items like adequate medical care, a good education, a decent home, a remunerative job, or a living wage when the doctor, teacher, construction worker, or business owner has a right to contract, the right to own property, and the right not to be held in servitude?  If I have a right to certain goods, who is to provide them, and how can I force them to give them to me without violating their rights?  Furthermore, who is the one to determine what a "livable wage", a "decent home" or "adequate healthcare" entails?  If I see two people engaged in a voluntary mutually-beneficial contract, and I don’t believe that one side of the deal is adequate, can I use force to stop their arrangement without violating their rights?  If I don't have the power to do that, how can anyone else obtain that power?

Definitions, Corollaries and Examples

These questions are meant to set the stage for the most important concept I've learned in my life: the relationship between rights, privileges, and property.  Once you master this lesson, all the social problems that seem so complicated are suddenly deconstructed to the root issue, that of property.  Since I learned this lesson from Michael Badnarik, I think it is appropriate that he introduce you to this concept as well.  I recommend watching his entire Constitution Class, and if you're lucky enough taking it in person.  This is 10 minutes of the 2004 Libertarian Party Presidential Candidate at his finest: on Rights vs Privileges.

So what did we learn from Badnarik's 10 minute lesson?  Here are the definitions and corollaries, shamelessly taken from his book, Good to be King: The Foundation of our Constitutional Freedom.

Right: A right implies the powers of free action; something you have the sovereign authority to do, because there is no higher authority to get permission from; you don't have to ask; you get to make the final decision.  This is the exact opposite of a …

Privilege: A particular and peculiar benefit or advantage enjoyed by a person, company, or class, beyond the common advantages of other citizens; a temporary authority granted to you by someone of a higher authority; a privilege can be revoked at any time for any reason.

The three corollaries of these definitions:

• All rights are derived from property;
• Every right implies a responsibility; and
• The only limitation on your rights is the equal rights of others.

So accepting these definitions for the sake of argument, let's apply them to the examples and controversial questions posed above and see what the results are.

Dr. Ron Paul has been chastised many times over his objection to the Civil Rights Act of 1964.  He has always maintained that the act was good with respect to dismantling the racist segregation laws that the government created in the first place, but he opposes the act in its capacity to violate the property rights of business owners.  On June 4th, 2004, when Congress celebrated the 40th anniversary of the Civil Rights Act, Ron Paul objected and made this point:

"The Civil Rights Act of 1964 gave the federal government unprecedented power over the hiring, employee relations, and customer service practices of every business in the country. The result was a massive violation of the rights of private property and contract, which are the bedrocks of free society. The federal government has no legitimate authority to infringe on the rights of private property owners to use their property as they please and to form (or not form) contracts with terms mutually agreeable to all parties. The rights of all private property owners, even those whose actions decent people find abhorrent, must be respected if we are to maintain a free society. "

While Dr. Paul has been labeled as a racist, a kook, and an idiot for this statement and others expressing his opposition to the portion of the Civil Rights Act impacting private business, taking his objection within the context of the definitions and corollaries of rights above, those ad-hominem attacks lose their credibility.  These are not the words of a closet racist yearning for the good old days of white only restaurants.  Instead, his principled stance in defense of property rights is in line with the expression, "I disapprove of what you say, but I will defend to the death your right to say it".

Similarly, Dr. Rand Paul was viciously attacked along the same lines for his philosophical point on the implications of a right to healthcare.  After stating that a right to healthcare implies the threat of force to conscript someone to supply it, Senator Bernie Sanders pulled a "gotcha" move on Senator Rand Paul and asked the witness Dr. Krauss "do you consider yourself a slave"  and if she is worried that the "police department in the middle of the night is going to break down your door and force you to treat a patient."  Senator Rand Paul was further criticized for making this point in the media when articles showed the clear differences in the standard of living of a slave in 19th century America to a doctor today.  These attacks miss the point.  Obviously, the life of a doctor in a western country with socialized healthcare cannot compare his day-to-day life to that of an agricultural slave.  But that was not the basis of comparison.  Paul said what he did to illustrate the definition of a right and the consequences of granting a positive right that would impose a duty to fulfill an obligation on another.  This is not mere rhetoric, because how we define rights determine how we see the world and how we judge the moral or immoral character of the actions of others.

The Definition of a Right Guides Moral Judgment

Let's take two examples from recent headlines to illustrate how our definition of a right would influence our moral judgment.  In the first case, hundreds of union Longshoremen exercised their right to a remunerative job by invading the Port of Longview, destroying railroad cars and grain, and holding security guards hostage.  Depending on your definition of a right you could approve of these tactics and view the criminals as the employer who denied the longshoremen their right to a decent wage and the non-union "scab" workers who conspired in this crime by accepting the job the union members rejected.

In another story we have 64 year old Martin Kessman fighting for his civil rights by suing fast-food chain White Castle because their booths were uncomfortable and not sufficiently designed for fat people.  If the government can indeed grant a right peculiar to one person or group beyond the common advantages of others by passing legislation, and if the Americans with Disabilities Act covers those with the disease of obesity, then this hero is fighting for his consumer rights against a criminal organization denying his seat at the table.

Unfortunately for civil discourse, many people would accept the sarcastic characterization of these stories because they have a fundamental difference or lack of opinion as to what a right means.  But this is not a mere "you say tomato, I say tomahto" or "live and let live" sort of dispute, these are serious accusations that result in criminal penalties!  In one case, we have invasion and destruction of property combined with hostage taking and terroristic threats.  But these criminals are shielded from the law while the employer and the voluntary workers are left defenseless against union violence.  If I don't have the right to destroy, loot, and kidnap my employer with immunity if I don't get the raise I want, how did these Longshoremen get that power?  Next, we have a group of people organized to provide hamburgers to the public on a strictly voluntary basis and a man using the courts to threaten legal force of law to shut them down and confiscate their property unless they offer hamburgers under conditions that please this busybody.  In a free society the owners of White Castle would have the right and freedom of action to offer hamburgers under any condition they wish, and they would be rewarded with profits if their decisions please the consumers while losses and bankruptcy would follow bad ones.

This isn't to say that living in a free society where property rights are respected  would cure all social ills.  Racism, sexism, and other discriminatory applications of the right of association would still exist just as they do today.  However, at least the perpetrators would be held accountable by the consuming public that would recognize and disapprove of these behaviors, and innocent people wouldn't be forcefully imposed with duties and obligations just because they are offering a good, service, or job to another under conditions that someone else doesn't approve.  Regardless, these utilitarian arguments are of secondary consideration to a libertarian of my stripe.  Instead, the genesis and morality of these definitions and applications of rights, privileges, and property come from the timeless libertarian principles of self-ownership, homesteading, and natural law.

The Libertarian Tradition

In this day it is not necessary to argue against the divine right of kings as the self-ownership axiom is generally accepted as self-evident.  We are all made of flesh and blood, and no one recognizes the authority of someone that claims to come from heaven with a mandate to rule over the sinners.  However, not long ago the idea that men were born into nature free and equal was a revolutionary idea, and it was this philosophy that lead to the American experiment of a sovereign people with unalienable rights who empower a limited government that is "bound by the chains of the Constitution".  Frank Chodorov noted the wide contrast this experiment made with the conventional wisdom of the time in his essay Return Revolution.  Acknowledging the radical implications of the metaphysical principles that all men are created equal and are endowed with inalienable rights, he wrote,

"This was a brand-new base for government.  In all political science hitherto known it had been an axiom that rights were privileges handed down to subjects by the sovereign power; hence there was nothing positive about them.  A new king or a new parliament could abrogate existing rights or extend them to other groups or establish new favorites.  The Americans, however, insisted that in the nature of things all rights inhere in the individual, by virtue of his existence, and that he instituted government for the sole purpose of preventing one citizen from violating the rights of another.  Sovereign power, they said, resides in the individual; the government is only the agency of his will."

Far from being uncontroversial, the principle of self-ownership turned the prevailing wisdom on its head and threatened the legitimacy of Kings with divine rights to rule and Thomas Hobbes' theories of absolutist governments.  An idea such as this did not materialize in a vacuum, rather the Jeffersonian branch of the founding fathers were influenced by English philosopher John Locke.  He wrote against both Kings and Leviathans in his Second Treatise of Government and tied together the ideas of natural law, self-ownership, and property rights in material objects through homesteading to promote a philosophy of government for the common good by the consent of the people.  Locke wrote,

"…every man has a property in his own person.  This nobody has any right to but himself.  The labour of his body and the work of his hands, we may say, are properly his.  Whatsoever, then, he removes out of the state that nature hath provided and left it in, he hath mixed his labour with it, and joined it to something that is his own, and thereby makes it his property.  It being by him removed from the common state nature placed it in, it hath by this labour something annexed to it that excludes the common right of other men.  For this labour being the unquestionable property of the labourer, no man but he can have a right to what is once joined to.…
Thus the grass my horse has bit, the turfs my servant has cut, and the ore I have dug in any place where I have a right to them in common with others, became my property without the assignation or consent of anybody.  The labour that was mine removing them out of that common state they were in, hath fixed my property in them."

The italicized portion of that quote highlights the most radical part of his philosophy.  Not only do men, by their nature, have unalienable rights over their body and mind, but rights over material property such as land and goods are also natural when obtained through homesteading or voluntary trade.  This is an important distinction, because while it is easy to recognize a rights violation when one man assaults another, it is difficult if not impossible to see it in material goods if one is not equipped with a theory of how those property rights originate in the first place.  Murray Rothbard wrote of this challenge in his libertarian treatise For a New Liberty,

"The libertarian … adopt[s] as his primary axiom the universal right of self-ownership, a right held by everyone by virtue of being a human being.
…
A more difficult task is to settle on a theory of property in nonhuman objects, in the things of this earth.
…
If, for example, we see X seizing a watch in the possession of Y we cannot automatically assume that X is aggressing against Y's right of property in the watch; for may not X have been the original, "true" owner of the watch who can therefore be said to be repossessing his own legitimate property?  In order to decide, we need a theory of justice in property, a theory that will tells us whether X or Y or indeed someone else is the legitimate owner."

It is the libertarian principles of natural law, self-ownership, and homesteading that provides this needed theory of justice that is universally applicable and results in common-sense moral judgment.  Without this, we would be in the world that Chodorov wrote of that preceded the American revolution, where no rights exist to the individual, only privileges granted by the sovereign power that can be revoked at any time.  Unfortunately, a sober reflection of today's western society admits that the idea of natural rights is going out of fashion, and the pendulum swings back to a time when rights are whatever the government decides to grant its subjects.  While the outward characteristic of the sovereign has changed from a divine King to the mob rule of democracy, the practical result is the same for the common man.

Conclusion

We started with the social problems of today, and proposed that a consistent application and acceptance of the definitions and corollaries of rights, privileges, and property that I first learned from Michael Badnarik could offer a solution.  I attempted to contrast the common-sense answers to our social problems deduced from natural rights with the absurdities and inner contradictions that appear when one accepts the proposition that a right is whatever the sovereign authority legislates it to be.  Recognizing that Badnarik was not the progenitor of this philosophy, I traced its lineage from John Locke to Murray Rothbard, and on the way illustrated how the founding of America was influenced by these ideas when self-ownership and natural rights were commonly accepted by the people.

At the risk of evoking Godwin's law, I will end with a thought experiment that I have asked myself from time to time as I have researched and studied these ideas.  It is a spin-off of the question that Michael Badnarik poses to his Constitution Class in the video below.  Rather than putting yourself in the position of a Jew in Nazi Germany and asking how badly would your rights have to be violated before you would forcibly resist, my thought experiment puts you in the seat of a patriotic, God-fearing German citizen.  Based on your conception of rights, privileges, property, and the relationship between men and their country, what would you have done when the sovereign, lawful, duly elected authority violated the natural rights of your neighbor?  Even if you did not accept the propaganda that the Jews and other social undesirables were the cause of the German economic crisis, how far would your inner conviction hold against the weight of popular opinion, and the desire to be patriotic and comply with the law of the land?  Would you take a job as a concentration camp guard because "the law is the law"?  Would you take a more noble profession, but rat out your gypsy neighbor in hiding because it would be unlawful not to do so?  Or would you stand on your inner convictions, regardless of the consequences, and realize that the natural rights of the minority were being violated by an immoral and unlawful government, doing everything in your power to hide and safe-keep as many innocent lives as you could?  While we will not face the same great moral question that was posed to the German of 1938, I believe we will face a question of equal magnitude in our lives, and an acceptance of natural rights as laid forth above would make one more likely than not to answer that question correctly.

Why and How to Protect your Savings with Gold and Silver

I started getting into gold and silver in March of 2008, buying as low as $909/oz for gold and $10.46/oz for silver.  Observing the current prices of $1800 and $40 per oz, I have seen a handsome return in paper profits.  However, I have never sold a single oz and continue to invest 25% of my after-tax income into gold and silver, thinking of it as my true savings.  Without getting into the intricacies of Austrian Business Cycle Theory, the purpose of this post is to give a high-level overview of why I have been investing in gold and silver, and how I recommend people do it.  In terms of Why, I will give a review of the history of commodity money, fiat paper money, how the United States got the dollar to be the world's reserve currency, and where the dollar is going from here.  For How, I will cover my perspective on the basic questions, the debates within the precious metals community, scams to avoid, and my detailed recommendations for which companies to use and what to buy depending on your unique situation.

As an introduction to this post, I highly recommending watching this 30 minute animated documentary The American Dream.  It's a humorous and surprisingly accurate introduction to the history of money and how we've gotten to where we are today.

Why?
Gold and Silver is real money

Imagine a world without money where everything we possessed would need to be created through our own production or direct exchange, also known as barter.  Despite my family heritage, I'm not much of a farmer, carpenter, or tailor, which leaves me with the option of bartering to obtain the goods I need to survive.  It would be unlikely that I could find others in a unique situation willing or able to directly accept my IT consulting services in exchange for food, shelter, clothing, or any other goods I may desire.  I would be left with few options and resort to producing these goods myself.  In such a world my standard of living would decrease dramatically, assuming I could survive at all.

Fortunately we don't live in a world without money.  Long ago, men in ancient barter economies realized that some goods were more readily accepted than others.  These goods rose in value in the minds of their owners not for their value in direct consumption, but because they could be traded in the market to others in order to obtain the things the owner actually wanted.  These goods became known as money, the medium of indirect exchange.  The discovery of money enabled savings, lengthened time preferences, and the division and specialization of labor; all of which are necessary conditions to facilitate modern civilizations and the high standard of living that many of us are blessed to enjoy.

Examples of early money include cowry shells, ivory jewelry, iron nails, salt, rice, barley, tobacco, alcohol and livestock.  The characteristics these goods generally had in common was portability, divisibility, durability, and acceptability.  Obviously, some of these examples performed better in one category than another.  A cow or piece of ivory jewelry isn't very divisible, and perishable goods such as tobacco or rice are not very durable.  Over time, precious metals, particularly gold and silver, rose in the market place as the best goods having the qualities of money.  No king decreed this to be so, in fact, no law could ever establish money out of a vacuum.  Instead, individuals acting in their own self-interest realized that gold was portable, divisible, durable, and acceptable, and as this truth became widely accepted the 6,000 year track record of gold as money began.

Despite recent statements by Ben Bernanke, gold and silver retain the characteristics that define them as money and remain so today.  Another crucial feature desired in money that precious metals posess is that they are finite and limited in supply.  For a good to have the money characteristic of acceptability, you would not want something overly abundant like air or water.  The limited supply and difficultly to counterfeit gold are the reasons it has maintained a remarkably steady value over thousands of years.  For instance, it is widely claimed that in ancient Rome a 1 oz gold coin could obtain the finest toga, sandals and belt.  Fast forward to the 1700's, 1800's, 1900's and today, that same 1 oz gold coin could purchase the finest men's suit of that era.  More recent examples from the last 100 years illustrating gold and silver's ability to maintain purchasing power include a meal, a fine rifle, and a barrel of oil.

Why?
The history of fiat paper money is not impressive

Leaving aside the ethical questions concerning our modern system of giving privileged institutions the role of printing money under force of legal tender laws, side-stepping the history of how warehouse receipts of commodity money were turned into money substitutes, and ignoring the arguably fraudulent nature of that transformation and of fractional-reserve banking itself, a mere empirical glance at the history of fiat paper currencies should give us pause to consider the potential fate of the US dollar and its status as the world's reserve currency.

The attempt to by-pass the role of traditional savings to obtain the illusory "free lunch" with paper money has been attempted numerous times in many nations since the birth of the printing press.  Some of the first examples of government issued paper money occurred in the American colonies before the revolution.  For one excuse or another, virtually all the original 13 colonies experimented with their own state-issued paper money.  While many assertions were made to only issue a certain amount of notes for a limited time and to redeem them back for silver at official rates, these promises were always broken under the force of economic law.  The pre-revolutionary colonies' attempts to keep the newly printed money at par with existing commodity backed money drove many of them to attempt price controls, which only contributed to shortages of the very goods in highest demand.  The continental currencies became so devalued that the phrase, "not worth a continental" was born.  This hard lesson guided the writers of the constitution to permit the Congress the exclusive power to coin money and forbid the states from emitting Bills of Credit or making "any Thing but gold and silver Coin a Tender in Payment of Debt."

This restriction on Congress was quickly subverted by Hamilton and his ideological branch of the founding fathers.  While hard money would be restored by presidents Thomas Jefferson and Andrew Jackson, the tide turned in 1913 with the creation of the Federal Reserve.  Since its inception, the dollar has lost 96% of its purchasing power.  The US is by far not alone in the unfortunate list of countries that have experienced high rates of inflation or even hyperinflation as they've failed to resist the temptation to print money.

I bought some of these from ebay to use as bookmarks and teaching aids... That's right, I'm a Quadrillionaire.

The most infamous example of hyperinflation was in Weimar Germany between 1921 and 1923, when the rate of inflation became so high that workers were paid twice a day so they could trade in their paper money for goods before it became worthless.  How did this happen?  At a high level, the combination of Germany leaving their gold standard to pay for remnant expenses of the first World War together with the massive reparations imposed on Germany at the Treaty of Versailles left them with an unpayable debt.  Backed into a corner, Germany printed money day and night to keep up with their falling exchange rates to obtain the gold and goods they needed.  Between 1921 and 1923, the amount of banknotes in circulation rose from 66 billion to 400,000 quadrillion marks.  In lieu of money printing accomplishing the miracle of transforming stones into bread, it left the German people more devastated than four years of war could ever achieve.

Why?
So what makes us different?

After World War II the United States was on a pseudo gold-standard where central banks, but not individuals, could redeem 35 federal reserve notes for 1 oz of gold from the US treasury.  Under this arrangement foreign countries around the world were more than willing to trade their goods and services for dollars. However, the money printing that funded LBJ's guns and butter programs and the massive costs of the Vietnam war caused US gold reserves to drain at a frightening rate as foreign countries and their central banks attempted to redeem their reserves of paper money for the gold we promised.  Hence, on August 15th 1971, under the excuse of protecting the dollar against evil speculators, Nixon severed the last remnant of the gold standard by introducing a new world of pure fiat paper money not tied to anything.  The $35 dollars that would theoretically entitle its owner to 1 gold oz now could only be redeemed for a twenty and three fives.

Rather than suffer the inflation typical of a money that is de-pegged from its commodity backing, the dollar was able to continue as the world's reserve currency.  This was possible due to the unique geo-political circumstances of the world's strategic energy resource, oil.  1971 saw the peak of US oil production, and the cartel created by the leading oil producing countries in the 60's, OPEC, traded their oil exclusively for dollars.  Thus, the dollar made a relatively easy transition from being the strongest actor in the world gold standard to maintaining the world's reserve currency status due to every country's need for oil and the happy circumstance that required dollars to buy it.  John Perkins, best selling author and former economic hit man, wrote that he helped facilitate a secret agreement between Saudi Arabia, the dominant partner in OPEC, and the United States, where oil would be sold exclusively for dollars at prices acceptable to American interests in exchange for military support for the Saudis and the understanding that the petrodollar profits would be invested in United States treasury bonds and other US interests. 

Whether this conspiracy transpired as described or not, the result is the same: for 40 years countries that would otherwise have no interest in amassing reserves of US paper have been required to trade their goods and services for US money and bonds in order to buy oil from other countries.  With Americans able to export inflation overseas, we have not had to exercise disipline over our money printing like other countries.  Noting that the price of oil has fluctuated against the dollar in line with the trend of gold and silver over the last ten years, remember that the common denominator is their measurement against the dollar and its major driver, money printing.  How much longer will this last?

Gold, Silver, and Oil.  The common denominator is US money printing.

Why?
The US government will continue to print money to pay its debts

Using the patterns of history and the laws of economics as our guide posts, it is clear that there are only a limited number of ways the future could pan out.  None of the likely options look good for the long term status of the dollar and the high standard of living Americans have grown to accustom.  We know that money operates under the law of supply and demand just like any other scarce good, such that other things being equal, a rise in the supply of paper dollars would translate to less demand for those dollars measured in everything else including food, gas, and gold.  So when we see gold, silver, and oil price graphs like those above and take into account the money supply chart below, it's clear that gold and silver pricing are not rising, it's that the dollar and other fiat paper currencies are actually falling.  Similarly, if we expect massive amounts of money printing in the future, we can expect a concomitant rise in the price of goods including gold and silver.

Increasing the supply of money is inflation, the rise in prices is the inevitable consequence.

Given this relationship between the amount of paper dollars created out of thin air by central banks and the price of gold and silver, what does the future hold?  With nearly every imaginable type of Keynesian stimulus program having been implemented, is it possible that sounder heads will prevail, new policies will be implemented, and we can get the 14 trillion dollar debt under control to save the dollar before it's too late?  Unfortunately, former U.S. Comptroller General David Walker has been a voice in the wilderness warning that our official debt is just the tip of the iceberg, as it does not include the money that is supposed to pay for the welfare benefits that a large segment of the population has come to expect and rely upon.

Now we have the elephant in the room, the unfunded liabilities of Medicare, Medicaid and Social Security.  Using the Social Security Trustees annual report, one analysis shows the combined unfunded liabilities of these programs is over 100 trillion dollars.  These unfunded liabilities are promises to pay money and benefits to our soon to retire baby-boom generation, many of whom have worked their whole lives paying their taxes and completely dependent on government promises for their retirement.  Just like former clients of Bernie Madoff, they believed in a program that was too good to be true and are now victims of a grandiose Ponzi Scheme.  The promised payouts are too large, the current workers are too poor, and the trust fund is just a briefcase full of bogus I.O.U's.

So what can we expect the government to do in such a situation?  In the aftermath of the recent US credit rating fall, Ben Bernanke assured the markets by promising to add more fuel to the fire by leaving interest rates at 0% for another 2 years.  Meanwhile, our Nobel Prize winning economist believes we haven't been printing enough money, and if only we could have a fake war with aliens we would get out of this slump in 18 months.  While anything could happen in the short run, in the long run I think the US government is going to do exactly what Weimar Germany did when they found themselves between a rock and a hard place: money printing.  If interest rates rise then all the banks that originally needed a bailout will go bust again, while keeping rates at zero prevent the malinvestments from being liquidated, ensuring a future of more recessions which will call for further "stimulus", rounds of quantitative easing, and bailouts.  As Greenspan says, "we have 0% chance of default, because we can always print the money."  A 14 trillion dollar debt, with 101 trillion in unfunded liabilities?  We can always print the money!  With words of wisdom like that from "the Maestro", I recommend you buy your gold and silver now and hold on tight, it has a long way to go.

Why / How?
Recommended Research

If this is all new information and your head is spinning, I would recommend taking a step back and doing some research to validate the claims I've made.  While the purpose of this post is to give high-level advice on the why and how to protect your savings with gold and silver, there remains other methods to protect yourself against the dollar, including foreign currencies, energy and agriculture stocks, and directly betting against the dollar by selling short or investing in an inverse long bond fund.  These options carry different levels of risk, and two great books that explore these alternatives are Crash Proof 2.0: How to Profit From the Economic Collapse by Peter Schiff, and The Dollar Meltdown: Surviving the Impending Currency Crisis with Gold, Oil, and Other Unconventional Investments by Charles Goyette.  While both books give excellent overviews of where we are and how we got here, Schiff's book basically recommends you call his brokerage firm, Euro Pacific Capital, in order to get access to his worldwide selection of hand-picked stocks in mining, energy, agriculture, and emerging markets.  Goyette's book gives specific recommendations of mutual funds and ETFs that provide similar exposure and are likely to be available options if you have a IRA or 401k.

Unfortunately I can't personally vouch from experience for everything I recommend, as this is the case with Euro Pacific Capital.  Due to the increased rules and regulations governing the financial industry, Peter Schiff has had to move much of his business offshore catering to international customers.  He has raised the minimum amount of money for US clients ranging from $25k for a brokerage account to $250k for a managed account.  For those that want to get exposed to Peter's expertise but don't have that starting capital, you can start with his family of mutual funds at just $2,500 each.  If you have the money for a EuroPac account but aren't familiar with Peter Schiff, I challenge you to watch him explain "Why the meltdown should have surprised no one" at the Austrian Scholars conference.  Ask yourself who else you would want managing your fortune?

How?
Introduction

If you've done your homework and see things as I do: that the current economic crisis is only the beginning; that this is the chickens of October 15th, 1971 coming home to roost; that no matter what the Federal Reserve does in the short term, the dollar is dead as the world's reserve currency in the long run; that this experiment with paper money will follow the fate of previous fiat currencies in history with inflation and devaluation; and that these unfortunate circumstances leave precious metals as one of the few safe havens to protect your savings, then it sounds like gold and silver is for you.

The reason I focus on the why before getting into the how of gold and silver investing is because I think it is vitally important that anyone thinking about getting into precious metals has the proper expectations and the right long-term mind set.  For instance, while Peter Schiff was able to predict the housing bubble bursting and the subsequent economic collapse, one thing he didn't foresee was the short term rally to the dollar.  During the recession of 2008 many of the foreign stocks Schiff recommended went down as much as 80%.  A client that didn't understand the why of Peter's strategy could have become scared and sold at the bottom, getting wiped out!  Compare that to the clients that were confident in the fundamentals of their long term strategy and decided to use that decline as a fire sale buying opportunity and doubled down on those stocks.  Needless to say, those foreign stocks that took such a beating in 2008 have now gone up 200% - 500%, blasting through their losses and making substantial profits for those confident enough in their long-term outlook that they could weather the storm of short-term losses.

Make sure you're getting into gold for the right reasons

The strategy I recommend is not about timing the market in the short term, but about positioning yourself to survive and possibly thrive under the long-term conditions I am confident will occur.  While I will offer specific advice for those that have a substantial nest egg invested in an IRA, 401k, or other government investment vehicle, the majority of my advice will apply to people like myself that don't have decades of work experience and hundreds of thousands of dollars to invest.  As a general guide, I think your best options are to get into physical possession of gold and silver with cash savings and begin a monthly accumulation program to achieve dollar cost averaging.  Any money trapped in a government investment vehicle with limited and traditional options should be transferred into precious metals IRAs, gold and silver ETFs and the other funds recommended in Goyette's book, or if possible, into an account with Euro Pacific Capital.  What follows are the details of how to accomplish this.

How?
Physical vs. Paper

I'll cut to the chase, physical gold and silver is the way to go.  This means buying coins and bars from a local coin shop or from one of the online precious metals mints and dealers that I recommend below, or buying physical gold and silver coins through a precious metals IRA that performs a custodial service of storing it for you.  In contrast, paper gold or silver includes certificates issued by banks or mints, futures accounts, and gold and silver Exchange Traded Funds (ETFs) like GLD and SLV.  These products are either promises to obtain physical gold in the future, or instruments that merely give you exposure to the price of gold allowing you to make profits by selling those futures or ETFs to someone that wants to own them.  Some of the drawbacks to owning paper gold include the high management fees of the ETFs, and the extreme improbability that a gold certificate will actually be redeemable for physical gold when you need it.  The other risk is that in an hyperinflationary scenario those paper profits could be wiped out and you'll be left holding worthless paper when you could have been accumulating physical possession of gold and silver instead.

However, there are certain circumstances where paper gold and silver might be a good option.  For instance, if you have a IRA or 401k that you don't want to cash out, and cannot convert to a precious metals IRA without leaving your job, then an ETF like GLD and SLV might be your only way to get exposed to the upside of precious metals.  Another reason one might want to keep some exposure to paper gold and silver is if you have a substantial amount of debt from a mortgage or student loans, in which case you can allow inflation to eat away at that debt and use your easily convertible paper profits to pay it down.

How?
Gold vs. Silver

The debate between gold and silver as being the better buy is another situation where I can't give advice that would apply to everyone indiscriminately, but it would depend on your situation in terms of your time horizon and risk level.  On the one hand, gold has the 6,000 year history of being money, and you still see gold being stored as money by central banks, while silver is the younger brother along for the ride.  However, silver's extensive industrial use and the gold to silver ratio make many speculate that silver has the largest percentage gains to come.  The gold to silver ratio is the amount of silver it would take to buy one oz of gold, and its 200 year average is around 37 to 1, while the naturally occurring ratio in the earth is 17 to 1, and the last time it hit that ratio was in 1980.  Looking at the 10 year chart below, we can see that the ratio recently hit a high of 83 oz of silver for 1 oz of gold, and with silver currently sitting at 43, it still looks like silver is the better buy with larger percentage gains compared to gold.

How much further will it go?  I'm not an expert, so I go with both.

In my short experience buying precious metals my silver has definitely outperformed my gold in paper profits.  Looking at the percentage gains of my earliest and cheapest purchases, my silver is up 378%, while my gold is up 103%, and my accumulated percentage gains including my most recent purchases has silver up 100.36% with gold up 50.23%.  However, the volatility factor should also be considered.  In less than one month between April and May of 2011 we saw silver rocket up to $50 and then fall to $33, a decrease of 34% in less than a month!  Some may not want that level of volatility, but with the right long-term mindset you could see that drop as a great buying opportunity to increase your position.  While gold and silver both have their pros and cons, I for one invest evenly between them, again, keeping my eggs in multiple baskets.

How?
Bullion vs. Numismatic

Let's get something straight, I do not recommend collecting baseball cards or rare stamps, at least not from the perspective of protecting your savings from a falling dollar.  Unfortunately, there are unscrupulous companies out there that advertise traditional gold coins like US Eagles, Canadian Maple Leaves and South African Krugerrands, but when you call them on the phone the salesman starts telling you about this great opportunity to buy rare 'numismatic' coins.  They talk about how these rare coins outperform traditional bullion coins, and use high-pressure sales techniques to set you on this path.  Don't fall for this scam!  Your goal should be to get the very best price and pay the very least premium possible per oz.  These numismatic coins cost hundreds of dollars more than bullion coins, ensuring a nice fat commission for the salesman.  Many people that have fallen for this have seen gold double in price, and yet they are just breaking even on their numismatic coins.

For what types of bullion I recommend, in terms of gold there isn't much difference in price between American Eagles, Canadian Maple Leafs, or South African Krugerrands.  For silver, however, I have decided to move towards privately minted silver coins and bars over government minted Eagles or Maple Leafs because of the much lower premium for the former.  You can save even more on premium per oz by getting 5, 10, or 100 oz bars.  I have found that Northwest Territorial Mint has a very low cost for their privately minted coins and bars, but their major downside is that the last few times I've ordered from them it took 6-8 weeks to get my order!  I also recommend junk silver to make smaller barter transactions an option.  Junk silver is pre-1963 US coins that are 90% silver.  Buying a $100 junk bag means it's face value adds up to $100, so this could be 200 half-dollars, 400 quarters, or 1,000 dimes.  Either way, this will add up to 71.5 oz of silver, and should definitely be part of your portfolio.

How?
Time the market vs. Monthly accumulation

I have found that timing the market is very difficult and emotionally straining.  When you have the long term perspective that the dollar is dead, and realize that many events could trigger a run from the dollar and all of those consequences could come much sooner than later, it's easy to see a sharp spike in the price and think the worst.  Before I found the option of a monthly accumulations program, I would try to save my money and wait for buying opportunities, but unfortunately those moments rarely overlapped.  I would see silver fall to $9, but I wouldn't have sufficient savings to make a large purchase.  By the time I had enough money saved up, I would see the price increase to $12 an oz, and as I waited for it to return to $10 it would go to $14, and then $16, and then $18.  Now that $12/oz price that I passed up looked great in retrospect, and I panic and buy at $18, only for it to fall back to $14!

Thankfully, I learned some good lessons from my first year in precious metals, and I have been employing a much more successful strategy in the last 2 years.  I have been participating in a monthly accumulation program for both gold and silver, which allows you to select a pre-determined amount of money to be automatically withdrawn from a bank account on a monthly or weekly basis, giving you that amount of gold or silver at that day's price down to the 10,000th of an oz.  I have been using Blanchard's monthly accumulation for gold, and Silver Saver for silver.  I signed up for Blanchard's program before Silver Saver existed, and unfortunately their program is behind the times.  You receive a mailed invoice once a month, your only option is American Eagle 1 oz coins, and you have to fax them to request your balance in whole ounces.

Silver Saver is the way of the future.  You can set up a silver or gold accumulation account with as little as $50 a month, and you can set up monthly, weekly, or one time purchases.  They have a website where you can see every purchase, that day's cost, the premium charge, your total amount of gold and silver saved, and its equivalent value in dollars.  If you were so inclined, you could even sell back your holdings to silver saver and they would write you a check.  However, that's certainly not what I would recommend, as you can take delivery of your precious metals with a wide variety of options, choosing between 1 oz Maple Leafs, American Eagles, Austrian Philharmonics, and Suisse Bars for gold, and $100 junk bags, 1000, 100, or 10 oz bars, privately minted 'Buffalo Rounds', Maple Leafs, or American Eagles for silver.  Best of all, they have a rewards program where you can refer friends to sign up for silver saver, and you will receive half of the premium silver saver charges when they sign up with your share code.  If you decide to sign up, I would appreciate it if you use share-code AX9GP.

The benefits of a monthly accumulation program are many.  For one thing, you take the emotional toil and buyers remorse out of the equation.  You also achieve dollar-cost averaging by buying in smaller amounts at a higher frequency to ride the wave as silver and gold go up and down.  What I recommend is starting a silver saver account at a weekly or monthly schedule that you can consider your true monthly savings (I save 25% of my after tax income), and combine that with saving federal reserve notes on the side, so that when you do see large drops in price you are prepared for that buying opportunity.  About the only time I have successfully timed the market in the short term was when I employed this strategy to pick up a $100 bag of junk silver at $33 right after it fell from $50.  I couldn't see it going much lower than that, and fortunately I was correct, as silver now sits back around the $40 mark.

How?
Home storage vs. Custodial storage vs. Safety deposit box

As a firm believer in holding your eggs in multiple baskets, I will outline the main options for how to store your physical gold and silver, as opposed to declaring that one method is the best and only way to go, as each method carries a different type of risk.  First off, if you have an IRA that is not restricted by your employer, a great option is to convert it into a precious metals IRA.  In this case you have the same tax deferment benefits of a traditional IRA, but you use that money to buy gold and silver coins of your choice, and your IRA custodian stores it for you.  While a google search for gold IRA will present you with dozens if not hundreds of options, two companies that I have personally done business with that sell gold and silver for IRAs and offer assistance in setting one up are Blanchard and Northwest Territorial Mint.  Peter Schiff's company Euro Pacific Precious Metals also offer this service, but they have a minimum order size of $10,000 for gold or silver.

Moving past the IRA option, there are other custodial services where a reputable company can professionally store and insure your gold and silver in a vault.  One option is Euro Pacific Capital's Perth Mint Certificate Program.  Under this program your gold would be stored out of the country, and guaranteed by the Western Government of Autralia, and further insured by Lloyds of London.  The certificates are transferable, and while the program requires a high minimum purchase, it offers no mark-up, free storage, and a low service fee.  Another company that offers storage services, but which I cannot personally attest to, is GoldSilver.com.  Apparently they offer insured storage vaults in Salt Lake City, Hong Kong, and Miami, with a minimum monthly fee of $20 - $25.  Finally, you can always store your precious metals in your local bank's safety deposit box.  However, considering the United State's history of confiscating gold from its citizens, the potential risk is that something similar could happen again in the future.  Maybe not outright confiscation, but given the close relationship between the government and major banks, it's not inconceivable that some kind of windfall profits tax could be implemented to punish the evil gold and silver speculators that help bring down the economy, and a government agent would be waiting at your safety deposit box to tax you accordingly.

Given those arguably remote risks, custodial storage of your precious metals does have the major benefit over home storage in protecting your investment from private criminals.  As a collapsing economy triggers social unrest and increased crime, the risk of home invasion becomes a real threat.  I have several suggestions to help mitigate this risk.  First off, loose lips sink ships.  All it takes is mentioning your gold and silver home storage to one untrustworthy friend or family member and your life savings could be at risk.  So first of all, only one trusted family member should know the location of your gold and silver.  While a safe bolted to your basement floor might seem like the ideal location for your entire stash, remember the philosophy of eggs in multiple baskets.  Having a small amount of gold and silver in a traditional safe that serves as a decoy, while keeping other stashes in diversion safes that resemble books, surge protectors, and cans of shaving cream wouldn't be a bad idea.  I've heard of some people hanging bags of coins in the drywall of their homes attached to their electrical outlets, and of course burying your gold and silver in a PVC pipe out in the yard is another option.  While the more creative you get in stashing your gold and silver reduces the risk of a robber stumbling upon it, just make sure that you don't forget the location of the stash yourself!

How?
Conclusion

To summarize this post, here are the bullet-point detailed recommendations taken from above:

If you have a substantial amount of money trapped in an IRA or 401k I would recommend you take a hard look at the consequences of cashing it out early, and at the least transfer it into a precious metals IRA, a Euro Pacific Capital brokerage account, or into the ETFs that track the price of gold and silver.

If you have a significant amount of cash available to make a one time purchase, I recommend you take physical possession of bullion coins from one of these dealers:

Blanchard: I have bought gold from them and they have good prices.  I'd recommend any of their 1 oz bullion coins such as American Eagles, Canadian Maple Leafs, Krugerrands, or Philharmonics.

Bullion Direct: When I was looking for the best price I could find for a $100 bag of junk silver, bullion direct had it.  They offer a wide variety of gold and silver coins, and I received my order in less than a week.

Euro Pacific Precious Metals: Peter Schiff's precious metals company, which has very low premiums, if you can afford the $10,000 minimum purchase.

Midas Resources: Ted Anderson, president and CEO of the Genesis Communications Network, is also a precious metals dealer.  He often has good introductory deals on gold and silver coins as a loss-leader, especially if you refer to an "Alex Jones radio special".  If you want to support his radio network of liberty-minded programs while investing in precious metals, give them a try.

Northwest Territorial Mint: I buy their privately minted bars because of the lower premium per oz over government issued coins.  Their downside is that they have taken 6-8 weeks to process and ship my order in the past.  They also offer custom engraved coins that I have given away for Christmas and birthday gifts.  While I don't recommend those as an investment, they can be beautiful and thoughtful gifts that could inspire the receiver to start thinking seriously about getting into precious metals.

Regardless of your situation, whether you can afford to invest $50 or $1000 a month, I recommend you start a monthly accumulation program to achieve dollar cost averaging.  I recommend Silver Saver over other programs because of it's online account management, variety of options for redemption, and rewards program.

Finally, I recommend that you save money in cash in addition to your monthly accumulation program, so that when you see 10-25% drops in price from the recent all-time high, you have the liquidity to either schedule a one time purchase through Silver Saver, or make a purchase from one of the bullion companies recommended above.

If you have feedback, comments, or questions, I would appreciate your e-mail.