Money and Currency in a Free Society

We live in times when government and central banks monopolize money and make it next to impossible for viable competing currencies to arise, which can make it difficult to see the possibility of other currency alternatives.

Picture a new village, untouched by current monetary laws. People begin exchanging goods through the process of bartering. This makes it difficult to know what you can buy, because the milkman will only need so many of the pouches that you manufacture. Because bartering can be inefficient, unpredictable, and unreliable, the people decide to represent their goods with something of value. They find copper, silver, and gold nearby, all unique, relatively limited (therefore they hold more value than, say, granite), and quite durable. Thus, they can represent their goods with these valuable metals (and to make it more convenient, paper guarantees to those metals).

Money does not get its value through “force” as some believe. When the people in the village were looking for a more effective way to exchange goods, they were not trying to represent force. They were aiming to represent value through metals that were limited enough to have value, had durability, and could not easily be counterfeit (or inflated).  Currency is never originally brought about by force or through government.

Historically government has gotten involved in currency for one reason: greed. Kings would debase the metals that the market freely used and valued. Kings would inflate and devalue the currency that was once stable when the market was in control. Government could not debase metals, clip coins, and print unsound paper money and expect people to voluntarily accept it, thus force was necessary to make it happen. Legal tender laws forced devalued government money on the people and markets.

It is difficult for government to grow when people demand the money to be backed by hard goods (such as metals). It is difficult for government to expand its presence when the money supply is stable and in the hands of the people. History clearly shows us that when government wants to expand its state or military presence beyond its usual bounds, it cannot do so without control over the nation’s money supply. Without the control of money, government would have to take every cent it needed directly from the people and businesses, an approach that would become very unpopular in a very short amount of time.

This is why governments have always tried to take control and monopolize money. If people are forced to use government money and cannot create a competing currency, they must use the money the government gives them. Government can then indirectly “tax” the people through inflation and devaluation of the currency. This allows government to grow its boundaries and influence without directly feeling the repercussions of a people who see their property forcefully go out the door to the government in the form of taxes. Monetary inflation is a very indirect and gradual process for government to take money from the people. And it can only work if people are forced to accept the debased and often worthless money. As the money supply grows without solid commodity backing, prices begin to rise, impacting poorer citizens the most.

This brings us to the U.S. Some have argued that the Constitution allows the government to pass legal tender laws and control many aspects of monetary policy. However, on close inspection, this power has been greatly abused and misinterpreted. The Constitution states:

Article I, Section 8: The Congress shall have Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

Article I, Section 10: No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

Congress has the power to coin money, regulate its value, but nowhere does it have the authority to force people to accept that money. Congress can create and regulate its money, but it cannot mandate that people use it through legal tender laws. The states are prohibited from coining money and are required to make only “gold and silver Coin a Tender in Payment of Debt.”

Neither the powers delegated to Congress nor the states give them the authority to shove a currency onto the people. “Legal tender” means tender in the payment of debt. The states are given the duty to be sure that only gold and silver can be legal tender. For legal and juristic purposes, only gold and silver are acceptable in the payments of debt. But this does not give the state the power to dictate the forms of other monetary commodities or economic exchanges that the people and market might come up with. In other words, the state controls the legal use of money in the payment of debt, but neither the state nor Congress has authority over the economic exchanges of money in the marketplace.

The Founders did not give the federal government the ability to monopolize currency and force it on the people. There is no power in the Constitution given to the government to restrict currency production and choice of the people and marketplace. In fact, many competing and private currencies functioned efficiently for a good part of the 1800s. Today, however, we accept legal tender laws as a legitimate role of Congress, when in reality they do nothing but unconstitutionally force a worthless currency on the people.

Consider the basic principles of modern legal tender laws. No government force or mandates would be necessary to encourage people to use a widespread, valuable, and sustainable currency. Legal tender laws and government coercion over money are always used to force a currency that would otherwise be worthless onto the people and marketplace. Imagine if the legal tender laws enacted in the 1960s, forcing people to accept Federal Reserve Notes, were repealed today. Who in their right minds would continue using a currency whose value consistently decreases, is in the control of seven central bankers, and in reality is worth nothing more than the paper on which it is printed?

People will often reply that repealing legal tender laws would lead to the creation of hundreds of private currencies and economic chaos. But remember something. Especially in today’s digital, national, and even global economy, a currency would have to be simple, recognizable, valuable, and widespread to have a chance of surviving in the market. People will naturally encourage and use the currency that holds the most value and brings the greatest amount of ease to transactions. If that is the currency produced by Congress, so be it.

Monetary freedom simply gives people the option of throwing off the restrictive chains of a centrally manipulated, inflated, and drastically devalued currency, the symptoms of a government out of control. Competition in money would force government to stay in line, live within its means (both domestically and overseas), and maintain high levels of sensibility and responsibility. History has visibly painted the picture that without control over money, government’s long-term abilities are only as able as those that the people directly delegate to it. Freedom of money plays a major role in ensuring freedom and representation in government.

“With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.” — F.A. Hayek

“Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.” — George Washington

“All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.” — John Adams

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.” — James A. Garfield

“We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” — Daniel Webster

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Deception in “Free Market” Banking

The free market is constantly blamed for mistakes made by banks, when in reality the economic problems begin when a free market is overridden with excessive and unnecessary government law, intervention, and agencies.

To grasp banking we must first learn and understand fractional reserve banking.

The fractional reserve banking system gives banks the chance to keep only a portion of their deposits in reserve, allowing them to loan or invest the rest. Today U.S. banks are required to keep only 10% of their deposits in reserve. So if you deposit $100 in the bank, legally the bank is only required to hold $10 of it in reserve. This provides cash for “day to day” privileges and allows the bank to invest in securities and loan out funds, among other things.

You may have heard how the “panics” in the 1800s were a failure of the free market. Many of the “panics” were caused from bank runs, meaning that the banks had overextended themselves and their promises and could not provide the money when customers decided to withdraw their holdings. In the 19th century banks kept gold (primarily) in their vaults and issued paper promises, so to speak, guaranteeing people their gold. Banks would print more of the paper money, loan it out or invest it, creating monetary inflation (because the new paper notes were not backed by more gold; rather they were diluting the value of the gold held in the bank’s vault).

In the Panic of 1819, both local banks and the national bank joined in the practice of spreading themselves too thin through fractional reserve lending. When people wanted to withdraw their funds and realized they couldn’t, it led to the bank runs and harsh economic conditions as the economy was forced to contract after the unsustainable monetary inflation.

The inflation caused by the banks led to higher prices domestically, an outflow of gold from the U.S. due to the suddenly more attractive prices from foreign producers, and banks were therefore forced to draw back on their commitments. The law in 1819, and for many years following, allowed banks to neglect their depositors’ holdings while still continuing their operations. If they overextended themselves, banks were given a special privilege and protection from government that allowed them to ignore their clients’ rightful and original property, and instead pursue the unsustainable and destructive road of monetary inflation and the creation of artificial credit.

I bring this up because people who support government and central economic intervention will often bring up the “financial panics” in the 1800s to show how disastrous a free market is. But the truth is that the government protections placed on banks helped cause a great majority of the panics. Because of the government protection, banks were able to take unnatural risks that never would have been possible in a free market. Government shielded banks when the fractional reserve process failed. In other words, the government protected the fractional reserve system in order to benefit banks, not the citizens.

Fast-forward to 1907. This was the time of the last “panic” before the Federal Reserve Act was signed into law, creating the central bank, in 1913. Once again this crisis came about because banks were unable to give customers their initial deposits. This caused a whole stream of withdrawals (or attempted withdrawals) by bank customers around the nation. Banks had placed the deposits into income-earning securities and did not have the necessary cash to meet customer demands.

After the Panic of 1907 and the umpteenth failure of fractional reserve lending, the attacks still were not aimed at the fractional reserve system. This system, when protected through law, gave banks the undoubted opportunity to inflate the money supply, overextend themselves in ways that would never be sustainable in a free market economy, and give little regard to the customers’ original property. Instead, economists began calling for a “lender of last resort” to bail out banks if they were caught overstretched in commitments. Many people don’t realize it, but the U.S. financial system has been in bailout mode for nearly a century since this event. In an otherwise relatively free market system, banking started as the largest sour grape of interventionism in the bunch.

What are the alternatives to fractional reserve lending, which has been criticized by free market, sound money supporters since its inception in the U.S.? Interestingly enough, the Romans sorted this out by making a clear legal distinction between “demand deposits” and “time deposits.”

Demand deposits are the deposits and withdrawals you and I make everyday. We expect to get the same amount of money that we initially deposited to the bank. Just as when you give $100 to a friend to hang on to for a week, you are not giving him the right to invest or spend it for his own personal gain at the risk of you completely losing that money.

Time deposits are essentially what we have today with Certificates of Deposit (CDs), where a depositor and a bank enter into an agreement of money guaranteed somewhere down the road (such as 1, 3, or 5 years). Time deposits represent fixed contracts where both parties know what they are getting into and what the terms and risks are.

Under a system similar to the Roman principles, banks would legally be required to hold 100% reserve rates with demand deposits. This guarantees that individual property is protected and not at risk of being permanently inflated or loaned away by the bank. With time deposits, however, the bank and the depositor agree on a certain time frame that the funds would be controlled by the bank, giving the bank the opportunity to invest or loan the money. If a depositor decided to withdraw his funds before the agreed-upon date he would be given a fee of some sort, just as we have with Certificates of Deposits today.

Understanding banking and monetary history in the U.S. is pivotal to understanding how booms, busts, and “panics” are initially created. Harsh economic times have more often than not, whether in the 19th, 20th, or 21st century, been created through government protections and privileges to certain industries, central manipulation of interest rates and credit, and unceasing government intervention in the economy.

People point to the failure of the fractional reserve system that occurred time and time again in the 1800s (through bank runs) and mistakenly shove the blame on the free market, and use it as an excuse to bring even more government intervention into the economy. History shows that when the free market is manipulated from outside forces the worst problems come about.

Today we are led to believe that a bailout-guaranteed, centrally manipulated, and government protected banking system is the most sustainable and sensible option. I have a very hard time believing this, just by looking through our own history. Government somehow fooled the majority into believing that it had absolutely nothing to do with causing “panics,” recessions, or any other rough economic situation you can think of.

It is long overdue that people cease buying into this ridiculous idea of an angelic government that knows the cure for every economic ill. Allowing the government and central bankers to freely mold and manipulate the economy is precisely what caused the many economic collapses over the decades and centuries. Freedom and the protection of private property represent the most solid and sustainable foundation for a prosperous economy.

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Adding to the Fire: Obama’s Regulatory Plans

Yesterday Barack Obama unveiled his new financial regulatory proposals. These include greatly expanding the scope of the Federal Reserve’s regulatory duties, creating a government agency to “protect consumers” from the financial industry, and increase government control over many investment and financial outlets.

The first problem with this proposal is that it completely disregards how this bubble and bust came about. “Lack of regulation” did not cause the bubble or the pain we feel today. In fact, it was the federal government and Federal Reserve who were actually encouraging banks and lenders to lower their lending standards to riskier customers. The government was pushing lower lending standards in the name of equality and the right for lower income families to own a home.

In Obama’s plan banks would be forced to hold the mortgage-backed securities they create and sell to investors, with the belief that they will be more conservative with their loans if their own money is on the line. The problem with this is that it ignores how mortgage-backed securities, or the secondary mortgage market, came about. For those who don’t know, the secondary mortgage market is where a bank sells a loan it made with a customer to another business, relieving the bank of the responsibility to maintain that loan. The business buying those loans from banks may hold them in its portfolio or group them into mortgage-backed securities and sell them to investors.

This market started with Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) created in 1937. Fannie and Freddie have enjoyed special privileges and treatment since their creation. They created the secondary mortgage market to give banks the opportunity to give more loans (and thereby sell them to Fannie and Freddie) and therefore give more people the chance to borrow money to buy a house.

In the 1990s, the Clinton administration continually pressured Fannie and Freddie to buy riskier mortgages from banks. This would encourage banks to sell mortgages to lower income individuals regardless of the increased risk of foreclosure involved. In 1999, after pressure from the federal government, Fannie Mae lowered some of its previous standards so it could buy riskier mortgages from the banks.

We often hear today that it was greed, deception, and lack of regulation that pushed subprime mortgages onto the market, when in reality these risky loans were being openly encouraged by the federal government. The mortgage bubble would not have been possible had it not been for Fannie and Freddie and the special government treatment they have received since their creation. Any government agency involved in the housing market (in both the Clinton and Bush administrations) was pressured to lower mortgage standards, allow lower income individuals and families to get loans, and ignore the extra risks and consequences.

The very reason why many politicians didn’t want equal treatment and oversight for Fannie and Freddie was because they thought it would take away the GSEs’ ability to “commit” to riskier customers. The government was pushing “affordable housing” by lowering mortgage standards in any way possible, rejecting the market’s natural rates of risk, and ignoring the risks involved with increased loans to people who clearly couldn’t afford them.

No one in government pushing these practices believed they were adding to an unsustainable and deadly bubble, and no amount of government regulators would have had the nerve to ignore what Congress, the President, and the Federal Reserve were all pressing for. The push for decreased mortgage standards for lower-income people gradually spread into decreased standards for the mortgage industry as a whole. Subprime mortgages were not the only portion of the mortgage market that crashed, many “prime” mortgages faced high foreclosure rates because of the spillover of decreased lending standards.

Obama’s plan assumes that forcing businesses in the secondary mortgage market (mainly Fannie and Freddie) to own part of their own mortgage-backed securities will solve the problem. If the government suddenly has to jump into the secondary mortgage market to ease and control the industry, why are we not simply allowing Freddie and Fannie to compete on the free market, suffer the consequences of unreasonable practices, and go bankrupt if necessary? Instead of allowing Freddie and Fannie to fail because of their poor practices, the government nationalized the two corporations last year. The secondary mortgage market would not have been possible had it not been for the government’s unending support for Fannie and Freddie. Rather than look at the root cause of the problem, Obama is taking an issue that the government essentially created and sustained and using it as an excuse to increase government regulatory power.

People rarely ask how banks suddenly got the money and ability to loan to people who obviously should not have gotten loans. In response to the bursting tech bubble and weak economy, then-Federal Reserve Chairman Alan Greenspan lowered the Fed’s interest rate to 1% for a full year starting in 2003. Greenspan kept rates artificially low for one purpose: lower rates mean banks can borrow more money, which they can loan out to more people (who otherwise couldn’t have gotten those loans) who will go out and spend those dollars. Lower interest rates encourage spending, borrowing, and discourage saving; if they are held at artificially low levels that money will drift to areas that it never would have gone before. By keeping rates at unsustainable and artificially low levels, the Fed gave banks the money and opportunity to loan cash to people who otherwise never could have gotten it (i.e. subprime mortgages).

The Federal Reserve’s easy money and cheap credit policy played a huge part in giving banks the chance to take advantage of their lowered lending standards. Lower lending standards coupled with the artificial credit from the Federal Reserve put the subprime mortgage market in full gear. Without the Fed, the banks could not have gotten that cash in the free market. It is frightening that the practices employed at the Fed, which were so instrumental in causing today’s mess, are now being looked upon as the solution. The leaders of the Fed are the very people who ignored the bubble forming from their own policies.

In 2005 Ben Bernanke said that rapidly rising housing prices “largely reflect strong economic fundamentals.” At the same time Greenspan said the housing market was merely experiencing “froth,” not a bubble, and would only correct in local markets. Why in the world would we want to give more power to the Fed and the people who manage it when they continually ignore the consequences of their easy money policies and denied for years that the housing bubble was unsustainable and irrational? Why are we listening to the people who helped create the problem, ignored the problem for as long as possible, and suddenly feel they have all the answers that will lead to massive economic damages if not put into place?

The fact that they see the same policies that brought us into this mess as the perfect solution should caution everyone about their judgment. Artificially low interest rates and cheap credit may boost the economy in the short-term – even for a few years as it did after the tech bubble burst until 2007 – but they will guarantee another bubble of this magnitude and a more disastrous bust several years down the road.

Because of the policies endlessly pursued by the Fed and the government over the past year (artificially low interest rates, bailouts, increased intervention) do not be surprised to see excessive malinvestment in the years ahead, a period of artificial wealth (just as the tech and house bubble “wealth” proved to be nonexistent after their respective bubbles popped), and a painful collapse.

Obama’s new regulatory plan is nothing more than a continuation and massive expansion of the exact policies that brought us to this point. More government and central control will not solve problems that they themselves were strongly supporting when the economy seemed to be in great shape. Obama’s plan simply hands buckets of gasoline to the arsonist watching the fire he started.

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Understanding the True Role of Government

One of the greatest misunderstandings we have with government today is its true and proper role. We have seen government continually grow through Republican and Democrat administrations and both parties, come election time, spout the same drivel that they think people will gobble right up.

You will notice that at every election the talk is always about how government will improve or stimulate the economy. Government is seen as the answer from both parties to build the economy to their liking. As government has worked itself into the economic affairs of people it is increasingly looked upon as the ideal way to stimulate the economy or “save and create” jobs.

The most crucial thing that we cannot ignore is the Constitution. The document that is supposed to restrain government gives absolutely no mention that its purpose is to create or maintain jobs, “strengthen” the economy, or get involved in any economic planning whatsoever. The Founders originally recognized that the federal government was to have very little control over the economy, in order to secure the freedoms and liberties of the people to make and control their own decisions.

Gradually over the past century, those in government have ignored the essential economic freedoms that were strongly protected in the Constitution. The passage of the 16th Amendment in 1913 and the ability of the government to tax citizens marked a beginning of the government’s economic entrenchment. How does giving the government the power to control how much of your own labor is actually yours even come close to fitting in with economic freedom? The ludicrous idea that we work several months every year for the government tramples the laws of freedom. It is central planning in one of its worst forms.

The expression (included in the Constitution) “regulation of commerce” was suddenly taken as an excuse to regulate the production, manufacturing, distribution, and sale of any product or item that the government felt it needed to. In the Founders time, regulation simply meant “to make regular.” Today government uses the word to influence or control next to anything it likes. This includes absurd regulations such as how much water a toilet bowl can hold and the size of holes in Swiss Cheese. The Constitution does not give the federal government near the authority to get this involved in affairs that would easily be solved by the people, market, and if necessary, the states.

Government has gradually shoved itself into the economy and individual affairs of the people. The Constitution’s protection of these basic rights seems irrelevant to the bureaucrats who can’t find anything that they won’t tax, regulate, or control in some manner. As the government takes more control from the people and adds to its own unconstitutional power, people become more reliant on the services of government. Individual initiative and responsibility slowly go out the door.

I cringe when I hear that the government needs to stimulate the economy or create jobs. Many people are so ignorant to believe that if we give government just a little bit more power, a little more control, that things will improve. It is a dangerous trend when people trust government more than their own judgment and choice.

Economic sustainability cannot come from government. It is impossible for government bureaucrats, regulators, and planners to calculate rewards and corresponding risks than the people who are actually putting their time, money, and labor on the line. As we have seen largely in the past decade, these public officials have absolutely no connection to fiscal sanity and the concepts of living within your means and suffering the consequences of reckless behavior.

Many politicians won’t stop preaching that the free market brought us into this economic mess. They say that capitalism and freedom breed greed and corruption. We can be sure that these statements are full of hot air when you consider that we haven’t had a “free market” for quite some time. Government has gotten itself so entrenched in individual lives, businesses, industries, and the whole economy that it isn’t humanely possible for us to have or have had a “free market” in recent history. The effects we are seeing today are the direct results of central planning, a government with little regard for the rule of law, and the consequential disregard for individual responsibility, personal freedom, and local governance.

I would hope that people can see the failures of central planning just by looking at the events of the past couple years. It is grossly unconstitutional, intrudes on the most basic traits of human nature, and does nothing but transfer the power of the people to the government. It is not sustainable, efficient, or productive. On another level it is not moral, sensible, or legal.

In short, government is not here to create, save, or guarantee jobs. Government is not here to stimulate the economy. Government’s primary purpose, as the Founders and the Constitution recognize, is to protect and defend individual liberty and freedom (including economic liberty). Government in its best role, which the Founders tirelessly pursued and fought for, is one that stays out of the affairs of the people, allows them to make their own decisions and choices, so long as they don’t intrude on the freedom or liberty of another individual.

Liberty is one and the same; it is not meant to be separated by government into groups, economic liberties, or civil liberties. Constitutionally (and I would think morally) the government does not have the authority to decide which liberties we can and cannot manage on our own, whether it be financial liberties, economic liberties, or civil liberties. One natural liberty without another is like a tree without its roots or branches. All-inclusive individual liberty is the only true liberty.

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The Deceit of the Drug War

The beginning of the loss of freedom is never an open, obvious, or direct process. As Thomas Jefferson said, “The natural progress of things is for liberty to yield and government to gain ground.”

Freedom is lost gradually from an uninterested, uninformed, uninvolved people. With this in mind, one area that cannot be ignored is the government’s involvement with drugs, such as marijuana, through the Drug War. The role of government in drugs must be reviewed and reconsidered.

In 2007 approximately 1.8 million people nationwide were arrested for violating drug laws. Since 1996, roughly 25% of newly incarcerated individuals are put in prison due to violating drug laws. The federal government spends more than $600 per second on the Drug War (in the range of $20 billion per year) and state governments altogether spend at least $30 billion. The Drug War’s ongoing costs are expanding (with enforcing the laws and maintaining prisoners) and cannot be ignored. Let’s start by exploring some of its history.

Several states started enacting prohibitions on marijuana in the early 20th century. In 1930 the Federal Bureau of Narcotics was created, and soon thereafter a campaign against marijuana began to help expand the agency. Much of the propaganda the agency used against marijuana was racist, false, and not backed by the American Medical Association (AMA).

The movement against marijuana, hemp, and cannabis was pushed forward by special interest groups who saw hemp specifically as a competitive threat. DuPont had recently patented nylon and jumped on the opportunity to take hemp out of the picture. Hemp was also a legitimate force in the paper industry and represented a threat to that area of the lumber industry. Pharmaceutical companies didn’t appreciate the fact that they couldn’t control the cannabis market, given the fact that people could grow it right in their backyard and didn’t rely on the commercial market.

At this point in time, the word “marijuana” was not included in the dictionary, it was a slang word originally used to describe cannabis. The drug “marijuana” was used somewhat as a cover by the government to limit and prohibit cannabis and hemp. It was all deceitfully lumped together in a way that made it very difficult for those who used hemp and cannabis for industrial uses to oppose the bill. To put it into perspective, it would be similar to the government today running a campaign against “dope.”

Dr. William Woodward of the AMA would explain in Congress that the AMA opposed the legislation, did not recognize any of the violence that the government linked with marijuana, and generally questioned the whole approach that the government was taking with the proceedings. In short, there was little to no medical evidence or support from the medical community that marijuana induced violence, one of the primary reasons for the government’s incessant attack on the substance.

The Marihuana Tax Act of 1937 was signed into law by Franklin Roosevelt on August 2, 1937, after several years of racist, medically unsupported, and exaggerated propaganda. Of course, in WWII the Department of Agriculture produced a video, “Hemp for Victory,” encouraging farmers to grow as much hemp as possible for the war effort. I can’t help but get the feeling that when the government needs it, it is okay to farm hemp. But when the government doesn’t have the urgent need for it, hemp is off the table. Tell me again where the federal government gets this power?

It is a shame that hemp got lumped in with the government’s anti-cannabis propaganda. Hemp is currently one of the most (if not the most) efficient prospects for renewable fuel. Hemp is an extraordinary plant that could easily cut down our dependence on oil, reliance on trees to produce paper, and expand the vital element of choice and competition in various areas of the economy. Over 25,000 products can be made with hemp. There is nothing remotely dangerous with hemp that the states and the market can’t work out that justifies prohibiting it from freely competing in the marketplace.

Remember, it was on hemp paper that Thomas Jefferson drafted the Declaration of Independence. Both Thomas Jefferson and George Washington grew hemp on their plantations. Plus, Benjamin Franklin owned a mill that made hemp paper. Hemp has been a very important crop throughout much of human history.

It boggles me that “small government” conservatives support the idea of the government regulating what plants you can grow in your backyard, what you can put in your own body, and other very individual decisions. The Drug War has been a failed attempt to regulate personal behavior, and all we have to show for it is a larger and stronger government, a less free citizenry, and hundreds of billions of wasted taxpayer dollars.

We can’t forget the lessons of alcohol Prohibition in the 1920s. People did not suddenly stop consuming alcohol, alcohol did not disappear, and as a result it was the gangs and criminals who ran the industry. It is a nearly identical situation we are in today with drugs. As with Prohibition, we are trying to control individual behavior, and the only way to bring it about is through increased government force and infringement on personal freedom.

At least a constitutional amendment was passed to bring Prohibition into law; Congress knew that the Constitution did not originally give that authority to the federal government. These necessary constitutional procedures seem to have been ignored when Richard Nixon signed the Drug Enforcement Administration (DEA) into law on July 1, 1973. This is an incredible amount of power to place with any branch of the federal government, no less the executive branch. The DEA is an agency that occupies 63 countries, employs several thousand agents, and plays a major part in the increased government involvement in individual lives. How does this follow the Constitution when an amendment was needed for the comparatively simple Prohibition of alcohol?

I am not sympathetic to drug users nor do I at all advocate the use of drugs. But as long as people do not intrude on the freedom and rights of others, it is not the business of the government to dictate what people can and cannot put in their bodies, and certainly not what they can grow on their own property.

Freedom means the freedom to make your own decisions, whether they be brilliant or boneheaded. Individual freedom does not mean the freedom to make whatever decisions the government approves of. And most importantly, our government is ruled by law, not men, and there is absolutely no authority for the government to control what we inhale, plant, or consume.

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Natural Rights of Freedom

Today we have lost many of the essential values and practices that the U.S. was founded upon. The Founders upheld the belief that humanity comes from God, who Himself is a free and eternal being. Every human is given the desire to be free of all artificial restraints and, in a sense, become just like the God that created them. The Founders revolutionarily transferred this belief of Natural Law into the works of government and the Constitution. Because humanity is a part (and some would say a gift) of God, humanity itself comes with certain properties, rights, and freedoms outside of the power of any legislator, government, or king.

“God who gave us life gave us liberty. And can the liberties of a nation be thought secure when we have removed their only firm basis, a conviction in the minds of the people that these liberties are a gift from God?” – Thomas Jefferson

We have forgotten that belief in Natural Law. So much unchecked power has since been placed in the hands of government; protecting the laws and rights of life, liberty, and property is no longer seen as the first and most important role of government. This, on its own, I see as a major departure from true morality and religion, and a most dangerous potential of things to come in the future.

What happened? We seem to believe that organized religion, not individual initiative, creates morality, spirituality, and true values. However, many of the Founders were not very active in any organized religion, as we know it. They saw religion as a platform of strong principles upon which every individual ought to voluntarily live upon, not as a bureaucracy that dictates what is right, what is wrong, and how people should live.

The problem with organized religion, and I believe the Founders recognized this, is that it starts with empowered people talking down to supposedly less knowledgeable individuals, not with individuals recognizing their roots to God inside themselves. Religion is not something to be passed down by bureaucracy; it all starts where it was initially created: inside every person. This is the basic principle that the Founders followed. When we began to follow the belief that religion comes from the top down (organized religion), we also accepted the idea that some or all of our God-given rights and freedoms come from empowered individuals higher up on the chain. It is a backwards way of thinking.

“Clearly the person who accepts the Church as an infallible guide will believe whatever the Church teaches.” – Saint Thomas Aquinas

“The highest manifestation of life consists in this: that a being governs its own actions. A thing which is always subject to the direction of another is somewhat of a dead thing.” – Saint Thomas Aquinas

I see true religion as principles and practices that are controlled, more than anything else, by the nurturing of an individual. The Founders repeatedly wrote and spoke about how the U.S. was founded on the principles of Christianity and Jesus, not on the principles of the Church. The teachings of Jesus and the Bible would do much good for the world (and I’m sure they do in many cases), but the principles are now spewed and diluted through organized religion.

Honest religion and spirituality does not start with a group, it starts with an individual. A group can certainly support an individual, but not through grasping for power and control over an individual’s principles and morals. We are too short-sighted to recognize that religion is much more powerful on an individual level than any bureaucracy can dream to be.

“Happiness is secured through virtue; it is a good attained by man’s own will.” – Saint Thomas Aquinas

Every individual is looking for happiness and freedom from artificial restraints, just as the Founders recognized in drafting the Constitution, supporting the Declaration of Independence, and ratifying the Bill of Rights. The Founders strongly believed that there was a higher law, a Natural Law, that starts with the individual and forms the basis of self-government.

Areas of personal religion that the Founders intended to remain an individual duty have underhandedly been transferred to the government. The Founders were adamant about personal charity, love to your fellow man, and following a strong moral bearing. Unfortunately, today we accept the notion that it is government’s role to engage in charity through various forms of welfare and special favors, an area that was supposed to be the cornerstone of individual religion and a moral nation. As we started losing touch with the power of individual morality, we attempted to transfer that power to government bureaucracies to engage in that morality for us.

A free and moral individual, citizenry, and nation, no matter how good the intentions, should never support the idea that government can spread charity by forcefully taking money from one group and giving it to another. The Founders would be appalled with these principles of government and the blatant disregard for individual responsibility to engage in basic charity and morality. When the Founders talked about a moral and religious nation, they were not talking about people going to church every Sunday. They were endlessly explaining the importance of individual religion and individual morals, untouched by the hand of government.

No matter how hard they may try, morality does not come from government, organized religion, or even a Saint. Morality and religion do not function if they are imposed on a person. True and untouchable morality, spirituality, and religion come only from ourselves when we are ready for truth – recognizing the power of love inside every one of us, the importance of personal charity, religion, and morals, and the principles of freedom and happiness from our Creator that remain inalienable to all. When we forget the principles of basic happiness, we forget the principles of basic freedom and liberty.

“When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them… We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” — Declaration of Independence

“It is the mutual duty of all to practice Christian forbearance, love, and charity toward each other.” – James Madison

“Man cannot make, or invent, or contrive principles: he can only discover them; and he ought to look through the discovery to the Author.” – Thomas Paine

“Our ancestors established their system of government on morality and religious sentiment. Moral habits, they believed, cannot safely be entrusted on any other foundation than religious principle, not any government secure which is not supported by moral habits…. Whatever makes men good Christians, makes them good citizens.” – Daniel Webster

“(T)he propitious smiles of Heaven can never be expected on a nation that disregards the eternal rules of order and right which Heaven itself has ordained.” – George Washington

“That religion, or the duty we owe to our Creator, and the manner of discharging it, can be directed only by reason and conviction, not by force or violence; and therefore all men are equally entitled to the free exercise of religion, according to the dictates of conscience.” – Patrick Henry

“Our constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” – John Adams

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