Ходжа Н. (hojja_nusreddin) wrote,
Ходжа Н.

Paul Rosenberg, The “Social Contract” Is a Fraud; Anyone Trying to Enforce It Is Acting Criminally

When you hear the word “social,” it’s even money that you’re being snookered
- “Social justice,” for example, is primarily a ruse for penalizing individuals
- without any finding of fact as to their individual guilt.
- Whether you actually did anything deserving of penalty is irrelevant…
- it’s “social”
- And if you question the deal, you’re a bad person.

The granddaddy of all the “social” scams, however, is the “social contract”

- That’s what replaced the “divine right of kings” in the 17th and 18th centuries,
- when it was falling apart.
- This is, in Wikipedia’s (slightly edited) words:
- a theory or model that addresses the questions of the origin of society and
- the legitimacy of the authority of the state over the individual.

In other words, this was the new explanation of why it’s right for one group of men to rule over other men

- Wikipedia continues:
- Arguments typically posit that individuals have consented, either explicitly or tacitly,
- to surrender some of their freedoms and
- submit to the authority of the ruler
- in exchange for protection of their remaining rights.

So, a group of rulers gets to ignore our rights

- take away our money (continually),
- punish us when it wishes, and
- even send us off to war.
- And that’s all okay because we somehow agreed to the "deal".
- It’s a “contract,” after all.

Except It’s Not

- If an adult wants to sign away his rights and
- make himself a serf to politicians,
- that’s his choice, and
- I won’t take it from him
- But for the deal to be legit,
- a clear agreement and authorizations on both sides are required.

A contract is
(again per Wikipedia, with my emphasis):
- An agreement having a lawful object entered into voluntarily
- by two or more parties,
- each of whom intends to create one or more legal obligations between them.
- The elements of a contract are “offer” and “acceptance” by “competent persons”
- having legal capacity,
- who exchange “consideration” to create “mutuality of obligation.”

The "social contract" fails this standard in multiple ways

- In fact, it is not a contract in any rational sense of the term.
- And if it’s not a contract, then
- the use of that word is fraudulent.

Fraud is a “false representation with the intent of persuading the victim to part with property”

- and that is precisely what is being done with the social contract,
- and on a gigantic scale.
- We have a supposed contract, and
- we have trillions of dollars changing hands,
- based upon its illegitimacy.
- If, in fact, it is not a contract, then
- the entirety of the arrangement is a massive criminal fraud.

So, is this the “social contract” legitimate?

- Let’s examine 5 crucial aspects of contracts:

1. Competence

In order to agree to a contract, one must be competent. You cannot, for example, make a contract with a hungry five-year-old, trading a few candy bars for a third of the child’s lifetime earnings. The child is not competent and any such agreement is rightly considered invalid.

The social contract, however, is held to be binding upon us from birth. How is that possible? Can an infant do what a five-year-old or even a twelve-year-old cannot?

Verdict: The social contract fails.

2. Voluntary agreement

A contract must be agreed to. I was never given a choice to sign or reject such an agreement, and I doubt that you were either. There can be no contract at all without a voluntary agreement. (See the next point below for the standard objection.)

Verdict: The social contract fails.

3. Without duress

A contract must be agreed to “without duress.” That is, without a threat of harm.

The standard objection to my “agreement” point above is that people agree to the social contract by their actions: If you use anything provided by a government, you automatically agree to the entire social contract. That line of argument fails in several ways (entrapment for starters, followed by being informed), but the largest issue in my mind is that of duress.

To get out of the social contract, we are told, we must leave the ruler’s territory. That places the ruler’s rights above our own as a starting point, which voids any semblance of “equal justice.” But I’ll pass up that discussion for today.

Leaving the ruler’s territory means spending large amounts of money, a tremendous amount of time to make arrangements, leaving our jobs behind, leaving all our friends behind, and leaving our entire families behind.

In other words, we can only escape the social contract by undertaking difficult, expensive, and heartbreaking actions.

Imagine a Fuller Brush salesman coming to your door and offering you an assortment of brushes for thirty dollars. Then, when you politely decline, he pulls out a gun and says “No! If you don’t want the deal, you have to abandon your house. Either pay me or leave.”

Is this salesman’s demand criminal? If so, the social contract is criminal as well. Both seek to secure agreements by using duress.

Verdict: The social contract fails, both legally and on grounds of cruelty.

4. Undue influence

Undue influence involves “one person taking advantage of a position of power over another person.”

Clearly, this applies to the social contract. First, we are compelled to attend schools run by the “other party” to the contract. These institutions teach us that the social contract is the way of the world and that any competing ideas would be crazy. And we are held in their classrooms five or more hours per day, beginning at five-years-old and running until adulthood. (If nothing else, consider the daily “Pledge of Allegiance” and try to count the number of times you were made to recite it.)

On top of that, the “other party” employs legions of armed men and authorizes them to violently subdue those who oppose them and their rules.

If these things are not undue influence, then nothing is. You can’t indoctrinate the other party, hold a sword to his throat, force him to sign, and still call it a contract.

Verdict: The social contract fails.

5. Mutuality of obligation

With no “mutuality of obligation,” there can be no contract. If the other side of the contract is not meeting their obligations, there must be recourse.

After the US government failed to protect New Yorkers on 9/11, all eight million of them should have been entitled to a refund. Clearly the other side of the deal failed to meet their obligations. (That, of course, didn’t happen: the loss of their rights only got worse.)

And then we have the doctrine of sovereign immunity, which removes all the most serious consequences from the other side of the deal.

There is no mutuality of obligation in the social contract. Therefore, it’s not a contract.

Verdict: The social contract fails.
I could go on, but I think my point is made. I have cited 5 clear violations of contract law and alluded to several others. If even one of these is valid, the “social contract” is invalid.

If the terms of a contract are uncertain or incomplete, it’s no contract at all. And for one party to continue to seize the goods of the other, claiming a contractual right to do so, is criminal fraud.

The Real Purpose of the “Contract”

As with the divine right of kings that preceded it, the hidden and essential aspect of the social contract is to give subjects a reason to submit.

The obvious reason for the subject to submit is that rulers employ thousands of armed men, who are authorized and prepared to punish disobedience. This, however, isn’t really enough for effective rulership. Policemen and jails are expensive, and many, many more than our current number would be required, if fear was the sole reason for obedience.

For governance to work, the subjects must believe that obeying is the right thing to do, and that’s where the social contract comes in: It gives people a reason to obey, beyond a mere threat. It saves them from having to face fear or even to consciously submit.

Strange as it may sound, an effective ruler must equip his or her subjects to obey. It’s a fundamental factor in rulership. And that’s the true purpose of the “social contract.”


By any legal standard, the “social contract” fails. That won’t cause any rulers to change, of course, but truth still matters to some of us.


Doug French, "The Hubris of the Monetary Social Contract"

Money was once in the state of nature. Goods were once bartered until especially saleable goods emerged to be used in indirect exchange. A variety of saleable items became money until gold and silver became the dominant currencies.

It didn’t take long for government to take over the production of money and now it’s fully part of the social contract, the theory that the state has authority over the individual. Socrates, in the words of Williamson Evers, believed government “is valuable to people, a contention which he supplements by saying that political society could not function without civil obedience to the orders contained in the laws or in commands issued by officials.”

People selected gold and silver as money. No government authority forced it upon the marketplace. Today’s individuals accept government’s fiat money because they are forced, by way of legal tender laws. Sadly, as individuals, our economic fates are, if not controlled, heavily influenced by the Federal Reserve’s PhD economists who desperately try to manage the economy. These wise men and women view individuals as being just data in their spreadsheets. These central bankers honestly think their job is to provide an orderly and prosperous economy with individuals gaining by giving up their rights and handing them to government.

Yet, these economists are mere mortals who don’t have the tools to produce a designed outcome. They rely on erroneous equilibrium models that, as Jim Rickards writes in his new book The Death of Money:
“assume efficient markets and rational behavior that have no correspondence to real markets.”

Janet Yellen and company believe they can push the right buttons and pull the right levers to make the economy hum, as if 314 million Americans are just that many unthinking, unfeeling particles in a science lab.
F.A. Hayek explained in his 1974 Nobel acceptance speech:
“such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process… will hardly ever be fully known or measurable.”

No single observer, or group of observers, could know all the factors determining prices and wages in a well-functioning marketplace. But because policy makers think they know, “an almost exclusive concentration on quantitatively measurable surface phenomena has produced a policy which has made matters worse,” Hayek said back in 1974.

Controlling the price of money is an awesome responsibility. “Given this immense power,” writes Rickards, “the ideal central banker would be humble, cautious, and deferential to market signals. Instead, modern central bankers are both bold and arrogant in their efforts to bend markets to their will.”

These aggressive monetary mandarins have so perverted markets that the axiom that money today is worth more than it is tomorrow has been turned on its head. Interest rates have been held near zero by the Fed’s scoping up Treasury securities, the source of collateral for the trillion-dollar repurchase-agreement market, turning repo rates negative.

In Europe, the euro overnight index average, or Eonia, a measure of borrowing costs in the euro zone calculated by the European Central Bank (ECB), turned negative (minus 0.004%) for the first time last week.

Negative rates, either real or nominal, is A-OK with the Fed, pushing the citizenry into making more purchases, or buying stocks. Meanwhile, according to a Gallup poll earlier this year, Americans, by a 62%-to-34% margin would rather save money than spend it.

“Higher equity prices will boost consumer wealth and help increase confidence, which can spur spending,”
said then Fed Chair Ben Bernanke, back in 2010. It’s all a part of the plan—the central plan—the social contract. Trust your government better; they have your (and your country’s) best interests at heart. Plowing your money into big-screen TVs and high beta stocks makes America strong. Never mind that the Fed’s zero-interest policies have cost savers $758 billion since the end of the Great Recession, according to MoneyRates.com.

“Low-interest-rate policies have helped bail out banks, the stock market and real estate, but the Fed has not publicly acknowledged the cost of those policies,”
Richard Barrington of MoneyRates.com says.

The central bank is run by Keynesians who are unshakable in their belief in a couple of things: the wealth effect and the paradox of thrift. The Fed heads figure if stock and home prices go up, people feel richer and spend more. Keynesians believe spending is good for the economy and savings is bad. Buying goods keeps people employed, we’re told, while hoarding savings does the opposite.

After 9/11, President Bush even urged:
“It’s to tell the traveling public: Get on board. Do your business around the country. Fly and enjoy America’s great destination spots. Get down to Disney World in Florida. Take your families and enjoy life, the way we want it to be enjoyed.”

Central bank-engineered low rates give the nation’s compliant subjects the incentive not to save but to spend the country back to riches. And the Keynesians figure that’s good because savings must just disappear. Except they don’t. Mark Skousen explains:
“Savings do not disappear from the economy; they are merely channeled into a different avenue. Savings are spent on investment capital now and then spent on consumer goods later.”

Savings are good for individuals and also build prosperous societies. Chris Casey explains in a piece for Mises.org:
examine any economic success story such as modern China, nineteenth century America, or post-World War II Japan and South Korea: did their economic rise derive from unbridled consumption, or strict frugality? The answer is self-evident: it is the savings from the curtailment of consumption, combined with minimal government involvement in economic affairs, which generates economic growth.

However, the central banker’s models lead to a fatal conceit pointing them in the wrong direction:
“The problems are real,” writes Rickards, “but the top-down solutions are illusory, the product of hubris and false ideologies.”

Rickards points out that political players have always had the impulse to impose central planning:
“It is both ironic and tragic that Western central banks have embraced central planning with gusto in the early twenty-first century, not long after the Soviet Union and Communist China abandoned it in the late twentieth.”

Hayek concluded:
The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society—a striving which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

While it sounds benevolent, the monetary social contract imprisons the masses in a world of booms, busts, inflation, and deflation that is devastating to our financial health, relegating generations of people to live in poverty.
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