The classical theories of government (liberalism or social-contract) hold that the state must own either nothing or everything. However, it is conceivable that there are other solutions; a phenomenon that is known today is that ownership is divorced from management.

The own-nothing theory is expounded lucidly by Prof. Murray N. Rothbard in For a New Liberty: The Libertarian Manifesto (Libertarian Review Foundation, New York: 1973, 1978, 1985.) The own-everything theory has been criticized above, in Chapter 13.

Does the distinction between ownership and management indeed exist? It can well be argued that it does. In at least some communities, one sees that there are certain decisions that are made with the most commendable accuracy: a population numbering millions will pay a substantial sum of money to an individual landowner. What is the character of this decision? Why is it quite regularly made in accordance with justice (i.e. with the consent of all [equally] concerned)? The answer is obvious; any failure would result in the immediate filing of a suit.

But, in acute contrast, we see highways claiming the right to refuse service to willing buyers, and exercising that right in the most capricious manner conceivable ¾ e. g. excluding the young people who could be the next generation of customers.

This characteristic of concentrating on short-term outcomes, and disregarding long-term consequences, is the hall-mark of management, as opposed to ownership.

Why is management (by delegates) practiced by proprietors? Investment advisers acknowledge that it regularly results in impaired results; owner-operated or closely-held corporations consistently out-perform others. The reason is that, in principle, management is simple (simple, that is, compared to entrepreneurship, which requires a sense of values.) The market provides the information that the management requires.

As we have seen, maximum profit for the provider is achieved by selling the marginal [last] unit of production at zero profit, the lowest plausible price; one need not hold goods off the market in order to operate at the lowest average cost.

However, one can only draw this conclusion if the cost-per-item increases progressively. There are many goods for which this is not true ¾ seats in an air-liner, for instance. The costs incurred may be large, but they do not get larger as more tickets are sold. There will be a certain amount of fixed costs, and then it will cost some additional amount to deliver a whole batch ¾ to make another flight.

We have already established that each producer has a break-even price at which it can just cover the cost of a batch. If this price is P₁ for a high-cost producer and P₂ for a low-cost one, then when supply equals demand at P₁, the first producer is only breaking even but the second is making a profit of (P₁ - P₂) on each item sold. Any down-turn in demand must wipe out the high-cost producer. Thus competition is unstable: where marginal cost does not vary with sales, a natural monopoly prevails.

But a profit-seeking monopoly, even as any other profit-maker, sells as many units as it can. The monopoly sells, if anything, more aggressively than the classical text-book manufacturer: its profits are increased ¾ or its losses are diminished ¾ by the whole of the marginal-item price, as opposed to its profits tending to a maximum. (Hence the innumerable special fares and special favors on air-lines.) In the case of a highway, not only over-charging but also under-charging (i. e. over-loading) is expensive; when once the minimum speed is reached, any additional load results in the traffic flow falling off precipitately.

We see, then, that the prevailing belief that a monopoly can tolerate bad management is unfounded; this belief is particularly false in the case of the highway, where the good is perfectly perishable. If one misses the opportunity to traverse the highway when traffic is sparse and high speeds can be attained, then that opportunity is gone beyond recovery. At present, we see the highways sacrificing profit both by leaving capacity unsold at off-peak hours, and also by allowing the speed to fall below the minimum at peak hours: the not-for-profit highway not only dissipates the earning power of the public investment, but also inflicts death and desolation upon the individuals and their property. It is, then, attractive to avoid the highways being monopolies.

The highway has the characteristic that it is ¾ to use one of today’s "pop" words ¾ synergistic; only when the whole system is in place, and the operators can count on finding it in place, does it function. (This, perhaps, explains why the function of establishing a post office and of providing post [and, in the Virginia Plan, military] roads was delegated by the States to the Congress.) Thus we may suppose that these extremely costly assets will continue to be publicly owned. (The prevalent theory is that the reason for public ownership is, that a facility that crosses the property of divers persons can only be built by exercising the power of eminent domain. However, the author would argue that this is a misunderstanding of the law of trespass; there is indeed a crime called "violent trespass," but intruding after giving notice and accepting service of suits is other than "violent." A private builder, one supposes, would be rather more conscious of the liability to pay compensation for the loss of use of property than is the public.)

If we admit public ownership we exclude the possibility of capitalism, which is private ownership and private management. Three possibilities necessarily remain. The most obvious is the opposite of capitalism, namely socialism, i.e. public ownership and public management. There are two distinct forms of socialism, namely state socialism, where the good is provided equally to all "citizens," and "democratic" socialism, where the public entity sells the good even as if it were a private company. The highways today are examples of the latter ¾ we see them claiming, and exercising, the right to refuse service.

The remaining two possibilities are, also obviously, Fascism or dirigisme , i.e. private ownership and public management (styled "regulation" or "managed competition" by its apologists), and the combination of public ownership and private management.

Yet another term, "steering" (a translation of the French dirigisme ) has been introduced by defenders of the former systemmes,Times New Roman">

Citizens have a right to move from State to State without losing any of their civil rights: and the U. S. respects this right. Any person, citizen or otherwise, has a right to enter a State with the consent of only that State: but the U. S. has usurped the power to "control" immigration.

The Congress has indeed created the privileges of bankruptcy, copyright and patents. But it has also created an unbelievable mass of other privileges, such as flying in the atmosphere and transmitting in the ether, which exist only so that they can be awarded to some citizens ¾ other than the highest bidder ¾ and denied to others.

Even the constitutional privileges, which are accessible to all, have less value than the people were entitled to expect. Bankruptcy proceedings in the U. S. courts are so slow, and consume so much of the assets, that creditors are reluctant to resort to bankruptcy, but instead submit to arbitration.

We have seen that the intent of the ratifiers was that no-one should go in fear of the U. S.: Congress was not authorized to lay hands on any person, even one guilty of treason. Today, no one can feel safe from the U. S., with its perjuring prosecutors and passive majority-dominated juries.

The cases of Dr. Frederick A. Cook, the explorer, Preston "Tin Goose" Tucker, the automotive pioneer, Rodney (Unfriendly Skies) Stich, the ex-F.A.A. whistleblower, Lyndon H. LaRouche, Jr., of the Democratic Party (perhaps because of his highly intellectual style, LaRouche is regularly cited as belonging to the Libertarian Party), Sun Myung Moon of the Unification Church, Rudy "Butch" Stanko, the meat processor, Michael Milken of Drexel, Burnham, Lambert (not one of whose bond issues has failed!) and John Z. de Lorean the Himself show unmistakably that the arch-offense against the U. S. is to do, not worse, but better than one’s neighbors.

The general reader can find an excellent exposition of the fact that the U. S. criminal justice system has been turned to the service of power, against liberty, in Gotcha!, by Carl W. Zimmerman (Event Horizon Press, Desert Hot Springs, Calif.: 1994.)

An archetypical example is examined in detail in The Case Against the General: Manuel Noriega and the Politics of American Justice, by Steve Albert (Scribner’s, New York: 1994) Today [1999] the case is more clear than ever, with the prosecution of the most successful enterprise since Ford Motor Company, viz. Microsoft.

The Congress is striving to advance, not the general welfare, but some persons relative to others ¾ to divide the people into an impotent mass of quarrelling factions. There are anti-trust laws, which prevent successful businesses from growing fast by buying up less successful ones (admittedly, States also have statutes that obstruct take-overs) and result in large corporations considering, not what would please their stock- holders, but rather what might provoke the Justice Department. Hence we see that the greatest enterprises, such as General Motors, General Electric, I. B. M., are the least enterprising.

Again, there are U. S. statutes "controlling" immigration (although naturalization alone was delegated to the U. S.) There is the infamous "War on Drugs," the pretext for the U. S. seizing the property of citizens without the consent of their peers, acting unanimously (although the power of "prohibiting the exportation or importation of any species of goods or commodities whatsoever" [Articles of Confederation, IX] has, ever since 1778, been appropriated to the States.) There are unequal taxes: there are duties on particular kinds of imports, paid by only some few of the people. There are U. S. statutes prohibiting polygamy, of all things that cannot possibly affect relations with foreign powers.

The Congress, we recall, was granted the power to tax with only one limitation, that the citizens of every State be taxed equally. (Nor has any amendment even pretended to relax this restriction ¾ the Sixteenth Amendment carries no suggestion of an unequal tax.) But, today, we see that the [many] poor States are taxed less than the [few] rich ones.

We see also that Congress chooses to refrain from collecting the taxes that are explicitly authorized, capitation and property taxes, and instead lays taxes on transactions, such as incomes (particularly those of persons with no votes at all, viz. corporations.) A capitation tax or a tax on property gives individuals an incentive to use their lives or their property in a manner that appeals to other people, i. e. that makes a profit. A tax on transactions gives individuals a disincentive so to do; such taxes can bring in comparatively little revenue (hence the continual attempts to explain to Congress that raising tax rates does not raise tax revenues.) To the Congress, paying the debts of the United States is less attractive than shattering the bonds that tie individuals together in a coherent society.

We have seen that the Congress is authorized to spend money for the common defense and the general welfare of these United States: this would include the Army, the Navy, the State Department, the Mint, the Supreme Court and the Secret Service (counterfeiting) ¾ perhaps a dime in every dollar of today’s budget. And Congress openly begrudges even this much money to necessary and proper purposes (I agree at once that the U.S. Army is a threat to the sovereignty of the States and even of foreign powers ¾ e. g. President Bush’s colonizations of Los Angeles, California, and of Somalia ¾ but the remedy for this is not to allow the army to become demoralized and out-of-date, it is to write laws that the executive dare not break.)

Today, we see U. S. funds being given to the States for one or another purpose ¾ as if the States would have ordered the U. S. to do anything that they could do for themselves (as observed above, "post roads" means those roads the States could not have justified.) The effect is, that the Congress now influences the actions of the several States.

We even see money being used for the welfare of no State, viz. so-called foreign aid. (Not all foreign aid is dedicated to the ¾ plausibly proper ¾ cause of defense.)

The history of these United States shows, from the very beginning, the reluctance of the Congress to satisfy the demand of the people for coins. First, Congress debased the gold coins. Then, it debased the subsidiary silver coins (the half, quarter, and dime.) Then, it debased the silver dollar. Then, it removed the silver from the fractional coins. Then, it did nothing when the Secretary of the Treasury debased the cent. Today, there are only about one-tenth as many coins as there should be ¾ a coin will buy ten times as much copper as it contains. (I must concede that there was one break in this regression; for a short time, the "trade" dollar, containing more than the standard 371-1/4 grains of silver, was U. S. legal tender. However, the Congress should not be given any credit for this remission, because it is not for the Congress to choose a legal tender.)

The history of the coinage illustrates particularly well the determination of Congress to obstruct and sabotage the general welfare. At one time, the mint was open to both silver and gold, and coinage was very close to free (there was a fee if you wanted your own metal coined and returned to you.) Bi-metallism is an, if not indeed the, ideal monetary system: the States could easily have chosen either gold or silver coin as their legal tender, and it would then have been possible to see whether profits-and-losses were being affected by changes in the value of one or the other metal (if all the "silver" States were seeing high profit margins and high interest rates, and all the "gold" States were struggling to avoid losses but had low interest rates, one would have known that the value of silver was going down relative to gold.) But the insolent, ignorant Congress chose to deny to the States useful information, and to impose an arbitrary exchange rate of 15:1 or, later, 16:1.

Let me add that I am not advocating that the Congress should resume minting coins until the value of the coins falls to that of the metal content; any change in the value of the money renders everyone’s accounts misleading (except, obviously, in States that have adopted gold or silver coin as their legal money.) What I advocate is the system of "Currency as Seigniorage." This system is simply that Congress mandate that the Treasury shall deliver a standard silver dollar to whomsoever hands in 371-1/4 grains of silver and a dollar of currency† (and a Double Eagle for 464 grains of gold and twenty dollars of currency.) If gold were priced, in currency, at $400, the seigniorage (the charge made by the Mint) would be 5%, which is very high compared to foreign gold coins. But as the currency depreciates, the seigniorage would become less and less: when the price of gold, in currency, rises to $1000, the seigniorage would be 2%, and all the gold of the world would be brought to the Treasury to be coined. Thus these United States could make a "soft landing" ¾ a gradual transition back to measuring in coins ¾ instead of being devastated by inflation.

The relationship between metal, specie and currency was set forth in my contribution to the Report to Congress of the Commission on the Role of Gold in the Domestic and International Monetary Systems (Volume II), March 1982.

Congress has divided the States into a small number of time zones, with borders running North-South (the zones in the contiguous States were originally defined by the railroad operators.) However, the Congress has not stopped at making a political decision; it has gone further, and acted upon its peculiar insight that the general welfare can be advanced by tricking the people into going to bed early in the summer. This excursion into Summer Time is supposed to save power that would otherwise be used for lighting in the evenings; the question of what happens when the people get up correspondingly early and find the day still dark ¾ and cold! ¾ is left unanswered.

The thesis of the Congress is, ostensibly, that the people are unable to arrive at an optimum solution by the classical process of trial-and-error. The congressional "fine tuning" ignores the cost to farmers, and airlines, and railroads, and bus operators, and others who deal with hard reality, of adjusting to capricious changes.

It is undeniable that the Senate and even the House itself are undemocratic. What we see is that measures go from a committee to the whole. But it is easier to correct errors at an early stage than at a late stage; those members who only participate in the whole have less influence than those sitting in the committee. Thus some States have more influence on, say, foreign affairs, and other States have more influence on banking. In contrast, the "conference committee" that reconciles the House and Senate versions of a measure is democratic; the few act only after the many. (Assuming that the committee does faithfully confine itself to items that at least one chamber has agreed.)

The relations between Senate and executive also are undemocratic. Presidents regularly nominate candidates for office who have not been advised by the Senate, and the Senate equally regularly plays up to this insolence by considering the nominee, instead of rejecting him by consensus. And, needless to say, treaties purporting to commit the States are made in the same aristocratic manner.

We find an undeniable admission that the States are entitled to a republican form of government in the institution of "senatorial courtesy," viz. presidential appointments of officers within a State are made only with the consent of the senator from that State. However, Washington claims for itself the power to choose between doing right or doing wrong; senatorial courtesy prevails only between members of the same political party.

But the consent of the Senate is enough only if the appointee were advised by the Senate in the first place: today, nominations are being originated by presidents, so that any group that has the ear of the president can have an influence on the policies of the U. S.

The persistent prominence of Freemasons on the U. S. Supreme Court (at one time, Felix Frankfurter, a Jew, was the only Justice who was not a Mason) has been documented by Paul A. Fisher in Behind the Lodge Door (Shield Publishing, 1988.) Douglas Reed, in his provocative synthesis of the history of recent millenia, The Controversy of Zion (Dolphin Press, Durban, South Africa: 1978; Veritas Publishing, Bullsbrook, West Australia: 1985; Concord Books, Seal Beach, California), marshals evidence that Eastern Jews (Ashkenazim), who have concentrated in urban States with large numbers of electors, have swayed presidential elections in the cause of Zionism. (True it is that the Twelfth Amendment has given the choice of the president to the large States: however, Reed does not understand the proper, democratic functioning of the electoral college, viz. the populace chooses the electors, but that elite, deliberatively, chooses the president ¾ even as the delegates of a party choose its candidate at a convention.) Many of the States are choosing their electors at large, so that if a State with nineteen similarly-sized Districts has ten Districts with Democratic majorities, the Democrats win 21 electors: but if a State chose only two electors at large, and the rest by Districts, the Democrats would win only twelve electors ¾ which would be more nearly proportional.

II, 3 [The president] shall from time to time give to the Congress information of the state of the union, and shall recommend to their consideration such measures as he shall judge necessary . . . .

Even measures that the president considers "necessary" can only be authorized by State officers.

II, 3 [The president] may, on extraordinary occasions, convene both houses, or either of them . . . .

The president can summon either or both houses; thus he can have no excuse for acting without the authority of State officers. But for him to take the initiative is "extraordinary."

II, 3 [The president] shall receive ambassadors and other public ministers; he shall take care that the laws be faithfully executed, and shall commission all the officers of the United States.

This is another affirmation of democracy. We see that if the president were careless, the laws would not be faithfully executed; this implies that the laws indeed determine what the executive is to do. Neither aristocracy or bureaucracy allows us to know whether the president has been "careful" or "faithful," the words are applicable only to executives.

The word "commission" does not imply that the officers are loyal only to the president; "the officers" includes ambassadors, consuls, judges, advised to him by the Senate.

III, 1 The judicial power of the United States, shall be vested in one supreme court, and in such inferior courts as the Congress may, from time to time, ordain and establish. The judges, both of the supreme and inferior courts, shall hold their offices during good behavior, and shall, at stated times, receive for their services a compensation, which shall not be diminished during their continuance in office.

Today, it is supposed that "good behavior" refers to what the judges do behind closed doors; however, it is more plausible that it refers to their public acts. The implication is that they are to follow a law that is writ for all to read.

There is indeed to be a judicial review of congressional legislation; the Congress is prohibited from discouraging such by reducing the judges’ pay. (Congress cannot be forbidden to increase the judges’ pay, as it is for the president’s, because the judges continue in office through one Congress after another.)

III, 2 [1] The judicial power shall extend to all cases, in law or equity, arising under this constitution, the laws of the United States, and treaties made, or which shall be made under their authority; to all cases affecting ambassadors, other public ministers and consuls; to all cases of admiralty and maritime jurisdiction; to controversies to which the United States shall be a party; to controversies between two or more States, between a State and citizens of another State, between citizens of different States, between citizens of the same State claiming land under grants of different States, and between a State, or the citizens thereof, and foreign states, citizens or subjects.

III, 2 [2] In all cases affecting ambassadors, other public ministers and consuls, and those in which a State shall be party, the supreme court shall have original jurisdiction. In all other cases before-mentioned, the supreme court shall have appellate jurisdiction, both as to law and fact, with such exceptions, and under such regulations as the Congress shall make.

The division between original and appellate jurisdiction corresponds to that between cases where the party has a right to be heard by the United States, and cases where the courts of the U. S. are more convenient.

IV, 4 The United States shall guarantee to every State in this union, a republican form of government, and shall protect each of them against invasion; and on application of the legislature, or of the executive (when the legislature cannot be convened), against domestic violence.

An invasion theatens all of the States, so that the U. S. can act, in the common defense, on its own initiative. But where only one State is concerned, the U. S. must wait for that State to authorize action.

V. The Congress, whenever two-thirds of both houses shall deem it necessary, shall propose amendments to this Constitution, or, on the application of the legislatures of two-thirds of the States, shall call a convention for proposing amendments, which, in either case, shall be valid to all intents and purposes, as part of this Constitution, when ratified by the legislatures of three-fourths of the several States, or by conventions in three-fourths thereof, as the one or the other mode of ratification shall be proposed by the Congress . . . .

Amendments to the Articles had been submitted and ratified by eleven or twelve States, but then vetoed by Rhode Island or New York; thus it was reasonable to arrange that two-thirds of the States be able to call a convention, where the dissenting State must either appear and persuade its peers, or admit that it had no reason on its side. Allowing three- rather than four-fourths of the States to ratify may be justifiable in the case of an amendment adopted in a convention, where the States act unanimously, but it was (we now know) a grave error for amendments originated by the Congress.

Allowing the Congress to choose the method of ratification is a violation of democracy. The anti-democratic method of amendment ¾ the Congress submitting the amendment to the States ¾ was a survival from the Articles of Confederation (because the Articles accepted the Congress as an equal, they could only be amended with the consent of the Congress.) The congressional initiative was, however, snuffed out in the Constitution of the (Democratic) Confederate States of America.

VI, 2 This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every State shall be bound thereby . . . .

This "supremacy" clause, it is contended by "conservatives," must mean that the laws of Congress can modify the laws of the States ¾ that democracy has been rejected. Whether the words mean this can be judged by comparing this provision with the corresponding provision in the Articles of Confederation:

Know ye that we the undersigned, by virtue of the power and authority to us given for that purpose, do by these presents, in the name and in behalf of our respective constituents, fully and entirely ratify and confirm each and every of the said articles of confederation and perpetual union, and all and singular the matters and things therein contained: and we do further solemnly plight and engage the faith of our respective constituents, that they shall abide by the determinations of the United States in Congress assembled, on all questions, which by the said confederation are submitted to them. And that the articles thereof shall be inviolably observed by the States we respectively represent, and that the Union shall be perpetual.

VII. The ratification of the conventions of nine States, shall be sufficient for the establishment of this constitution between the States so ratifying the same. DONE in convention, by the unanimous consent of the States present . . . .

The nine States do not attempt to speak for the minority of four States. If the four largest States had held aloof, they would have had more voters than the nine under the Constitution.

After democracy, the second great safeguard against power is republicanism, the regular choosing of the officers afresh.

I, 2 [1] The House of Representatives shall be composed of members chosen every second year by the people of the several States, and the electors in each State shall have the qualifications requisite for electors of the most numerous branch of the State legislature.

I, 2 [2] No person shall be a Representative who shall not have attained to the age of twenty-five years, and been seven years a citizen of the United States, and shall not, when elected, be an inhabitant of that State in which he shall be chosen.

The importance of republicanism is emphasised by the "inhabitant" restriction; being elected is a testimony to one’s abilities only if the people are choosing among characters whom they know.

I, 2 [5] The House of Representatives shall choose their speaker and other officers;

I, 3 [1] The Senate of the United States shall be composed of two Senators from each State, chosen by the legislature thereof, for six years . . . .

I, 3 [3] No person shall be a Senator who shall not have attained to the age of thirty years, and been nine years a citizen of the United States, and shall not, when elected, be an inhabitant of that State for which he shall be chosen.

I, 3 [5] The Senate shall choose their . . . officers,

The restrictions on age and citizenship are perplexing; one would suppose that whomsoever is chosen by the legislature of his own State must ipso facto be qualified for the office.

II, 1 [1] The executive power shall be vested in a president . . . . He shall hold his office during the term of four years, and, together with the vice president, chosen for the same term, be elected as follows:

II, 1 [2] Each State shall appoint, in such manner as the legislature thereof may direct, a number of electors, equal to the whole number of senators and representatives to which the State may be entitled in Congress; but no Senator or Representative, or person holding an office of trust or profit under the United States, shall be appointed an elector.

II, i [3] The electors shall meet in their respective States, and vote by ballot for two persons, of whom one at least shall not be an inhabitant of the same State with themselves. And they shall make a list of all the persons voted for, and of the number of votes for each; which list they shall sign and certify, and transmit sealed to the seat of the government of the United States, directed to the president of the Senate. The president of the Senate shall . . . open all the certificates and the votes shall then be counted. The person having the greatest number of votes shall be the president, if such number be a majority of the whole number of electors appointed; and if there be more than one who have such majority, and have an equal number of votes, then the House of Repesentatives shall immediately choose by ballot one of them for president; and if no person have a majority, then from the next five highest on the list, the House shall, in like manner, choose the president. But in choosing the president, the votes shall be taken by States, the representation from each State having one vote; a quorum for this purpose shall consist of a member or members from two-thirds of the States, and a majority of all the States shall be necessary to a choice. In every case, after the choice of the president, the person having the greatest number of votes of the electors shall be the vice president. But if there should remain two or more who have equal votes, the Senate shall choose from them by ballot the vice president.