Dear Ken, > I appreciate James and Bob's comments on regulation.
I appreciate it if you'd call me "Jim." It often surprises people to learn that I'm not the only James Davidson, nor do I prefer to be called that name. > But I never suggested government regulation. Sure. My comment about government regulation was to be pre-emptive, in case someone came to the conclusion that we should expect the government to "save us" from evil Ponzi schemes. Since the USA feral gummint operates the very largest such scheme, the Social Security scam, we can eliminate the possibility of such protection. (As you know, they steal and gavage and kill to "protect" us.) > Self-regulation is the best way to keep an industry > clean. Perhaps it is, but that doesn't say much for it. One man's self-regulated industry is another's cartel operating in restraint of trade. Interfering with the sanctity of contracts is not a good idea, but it is common place. > True Ponzi schemes are fraud. Absolutely. Any scheme which attempts to show benefits by paying early investors with the receipts from new investors is fraudulent and doomed to fail. Hence my comment about Social Security. > And fraud should be punished by the State > after the fact, not by regulation. Here, we must disagree. Punishment is not of much help. Compensating the victims should be the emphasis of all criminal justice as well as all tort justice. Making the perpetrator (criminal or negligent individual) pay compensation is sufficient. Punishment after the fact is particularly poor. All retaliation should be swift and immediate. That's why a well-armed populace is a much safer populace, compared to a disarmed populace that are "protected" by police and a courts system. Guns in the hands of individuals deter crime, because the criminal fears being killed by his would-be victim. (And e-gold may be used to buy guns!) Even the death penalty has been shown not to be a deterrent, for many reasons. And, the State is an exceptionally incompetent entity for providing any sort of jurisprudence or punishment. All fines accruing in criminal cases go to the state, zero to the victims. I think that says it all. The state is useless. As a provider of justice, it is worse than useless. > If an exchange agent or a currency operator has strong > reason to believe that someone is trying to run > fraudulently obtained money through their system, What does it mean "fraudulently obtained money" and how do you get it to run? Seriously, I have difficulty with this concept. The act of fraud is bad for the victim, and the victim should be compensated by the criminal. But the money isn't tainted. And, who is to say whether the money was obtained by fraud? Is a contract that benefits one party much more than the other fraud? > or to use their system to run a fraudulent program, > they should take steps to stop doing business with > that individual and prevent them from using their system. That would depend very much on what steps they take. Opening up the e-gold archives to every SEC agent and other government agent in the country would not seem to be a useful step. Does e-gold even require that warrants and subpoenas be presented? I would hope so. Personal experience of prosecutors lying to obtain warrants and subpoenae make it clear to me that such is not enough. How do you prevent someone from using e-gold? As a medium of exchange, it is hard to stop. Cancel one account and six more can be created in the time it took to come to the decision to cancel that account. How are the victims helped by canceling one or another account? How are they compensated for their loss if the criminal cannot get at the money to pay them back (assuming he is in some way coerced or persuaded to do so)? Go back to my example of Federal Reserve Notes. You don't expect anyone to stop a fraud artist from using Federal Reserve Notes. You can't stop chain letter enthusiasts from buying postage stamps. You are confusing the tool with the crime. > That is basic common sense. Which is the BASIC and which the sense? Sense is not all that common, I think, which is why it is valued. > This is part of the duty of every man to love his > neighbor. Jesus informed us of a policy of loving our neighbors as we love ourselves. He does not express this advice as a duty, but suggests instead that it is the foundation of better dealings with others. The most interesting part of this philosophy that Jesus extols is the agency for enforcement: the individual who acts on these ideas gets better results (like a man who builds a home on rock instead of sand). Jesus doesn't suggest that an industry regulating agency, whether industry based or government based should be set up to punish interlopers after the fact. Put not your faith in men. > If you know someone is a scammer you should not help > them in hurting other people. Helping someone to hurt others is to be an accomplice to the crime. However, I know of no obligation save two: to do what I think is right and take no part in a slave society. Hurting other people is wrong and often unjust. Nothing I do to interfere with the work of a con man can make his victims safe. Only the victim can safeguard the victim. For, if we posit a private agency that guards us against all fraud and all initiatory force, who shall guard us against these powerful and awesome guardians? Delegate at your own risk. Some things are Latin catch phrases, like "caveat omni" and "qui custodiet custodiens" because the best thinking on the subject was done thousands of years ago and the state of the art hasn't improved. > It has nothing to do with the State. Just self-government. Well, I'm glad you say so, Ken. I wasn't very pleased with that after-the-fact-punishment role you identified for the State. I don't happen to seek a state powerful enough to punish anyone. I'm sure that individuals have liberty to defend themselves and to demand compensation of those who harm them; I'm not sure there is any proper power or liberty to punish others, so I'm not confident of the delegation of this power to the State. I am supremely confident that any such power to punish will be abused by those who control the state. The arguments for this point are cogently stated by Alvin and Heidi Toffler in their masterpiece _Powershift: Knowledge, Wealth, and Violence on the Edge of the 21st Century_. Self-government is just, and only self-government can be truly just. But self-government does not mean that I should attempt to regulate your affairs, nor that e-gold should attempt to regulate mine. Self-government means the individual should regulate himself. And defend himself. And engage in private transactions for his own benefit. We agree that raping the public for taxes to pay for a poor system of regulation and enforcement is a poor means for advancing justice or liberty. I don't agree that fraud in the market place obligates any vendor to intervene. Caveat emptor, or as I prefer to put it, caveat omni, is the watchword that defends against fraud. E-gold, were it to spend all its money on defending against fraudsters and HYIP confidence schemes, cannot do the work. The only way to defend an individual against fraud is for that individual to exercise caution, to be wary, and to be vigilant. That's the price of freedom, and every individual must pay. There is no such thing as a free lunch. TANSTAAFL. E-gold, or a yet-to-be-conceived industry association cannot prevent all instances of fraud. I would worry about the power of any agency, private or otherwise, that could do so. The consequences of the invasion of private transactions and the impairment of contracts would be great enough to weigh heavily against the supposed benefits of protection from fraud. Self-government means the individual is responsible for his own welfare. It means that he is free to be cheated, free to starve to death, and free to find better people to deal with, while yet being free to get rich. Encumber him with rules if you must, and watch out for him as you please, but don't imagine that you can make another a whit more safe or a bit more free. Your concern is noble. Sometimes, though, when there is nothing good that can be done, the best thing to do about a perceived problem is nothing. The presence of any agency, even a private one, that attempts to protect against fraud, creates a false sense of security. It cannot be wholly effective, but if it suggests to some users that they cannot be defrauded, it does them a disservice. Information is not free, either. Remove the cost of knowledge, and you remove much of its value. Not everyone can learn every lesson from others; some must be learnt by direct experience. Yes, fraud does much damage, but it also teaches wariness, suspicion, and reflection. Deals that appear too good to be true should be regarded with suspicion. How do you teach others to be suspicious? Rather than protecting the consumer or investor from being defrauded, I would suggest that all efforts to help others in this area be turned toward the matter of compensating them once they've been cheated. Having the SEC seize the assets of alleged criminals helps the SEC; it does nothing for the victims. A program to identify fraudsters and their victims and a program to achieve the compensation of the victims by the criminals would be useful steps. I'm not at all sure how to proceed with either program. But I'm quite confident that giving coffee and donuts to SEC agents isn't helping combat fraud. Regards, Jim http://www.goldbarterholdings.com/ http://www.two-cents-worth.com/?101468&EG --- You are currently subscribed to e-gold-list as: [email protected] To unsubscribe send a blank email to [EMAIL PROTECTED] http://www.e-gold.com/stats.html lets you observe the e-gold system's activity now!
