Monday, April 27, 2015

Marie Villard's House and People of Positive Net Worth

Marie Villard was a free woman of color who owned property in New Orleans during and after the War of 1812. At one point, she sold her house to help Pierre and Jean Laffite finance their new venture in Galveston. Once the privateering operation was on solid financial ground, Jean and Pierre bought her house anew and presumably also something more to repay her for the money they borrowed from her.
At a time when a common laborer earned a dollar a day, Marie Villard owned a house worth nine thousand dollars. And what's more, she was not paying on a thirty year mortgage. The house was bought in four equal installments and owned outright in short order. Yes, some interest may have been paid to the seller for deferring the entire sum upon purchase, but Marie did not spend her entire life in debt, paying on a government financed loan,  just to eventually own a house outright in the distant future. She was not rich, but it probably would not be amiss to say that she was middle class, compared to other people in the society in which she lived. Some people had a great deal more. Some people had a great deal less. Marie Villard was somewhere in the middle.

Today, we hear quite a lot about the importance of the middle class, and every politician pretends that whatever measures he is sponsoring will favor the middle class over and above other classes, as if this were the only class that mattered. But a healthy society can't consist of just people in the middle class. In order to have a middle class, there also has to be a lower class and an upper class, because the term is relative. Without other classes in society, talking about the middle class would be meaningless.

It does not make sense to care only about the middle class. For a politician to campaign in favor of some people and against others means that he is not planning to represent everyone. Like a healthy ecological system, a healthy economy requires all levels of the pyramid in order to function. All levels save one: those who do not keep their promises and end up insolvent.

"People with a Positive Net Worth Unite!" Yesterday I made a T-shirt with the slogan represented above, except that I did not think to use the word "insolvent" at first, when describing the underground portion of the pyramid. I wrote "those in debt", which someone pointed out to me did not actually imply a negative net worth. So I rephrased.

There is nothing wrong with being in debt, if you are paying on that debt according to the agreement with the lender and do eventually pay it off. There is nothing wrong with borrowing money. There is nothing wrong with lending money. All that is also part of a healthy society and a healthy economy. Sometimes you don't have the full purchase price for an item you want, and someone else does, and will gladly lend it to you for a fee. The fee is called interest, and, no, I don't oppose "usury" -- the interest should be whatever the parties agree on of their own free will.

But in our current society, there are people who borrow more than they can possibly ever repay. Then they vote for politicians who will cause inflation, so that they can easily repay the same sum in money that is now worthless. It's happening as we speak, and believe it or not it happened after the war of 1812, too, during the Panic of 1819.

Many of the insolvent are considered "wealthy" as they can manage to borrow lots of money, and others are considered middle class, because they borrow less money. And some are considered poor, because their income allows them to only borrow a little money. What all these people have in common is a negative net worth.

Meanwhile other people stay within their means, however modest or however extravagant, so they have a positive net worth. The man who sleeps on the street and has only a dollar in his pocket, but owes nothing to anyone, has a positive net worth. The woman who lives in a small rented apartment in the city and walks to work and pays her bills promptly is also a person of positive net worth. The middle class family that lives in a house they own and whose mortgage they could easily repay even if the chief breadwinner were to be laid off tomorrow is also a family of positive net worth. And the millionaire in his luxury suite is  a person of positive net worth -- only as long as he has not borrowed more than he can repay come the  next stock market crash.

People of positive net worth, however rich or poor they are in income, should unite. Like Marie Villard in her day, we all have a common interest in saving ourselves and our future from the insolvent.

It's not really the rich against the poor or the middle class against the lower class. There is no sin in being poor. There is no sin in being rich. There is no shame or dishonor in being anywhere in the middle. All such people should be free to live their lives as they choose. But when people who owe more than they are worth vote for inflationary measures, they rob everyone -- even the person who only has a single dollar in his pocket. The problem is hidden beneath the ground, under the social pyramid we usually hear about.

Friday, April 24, 2015

The Neutrality Act and Saving Civilians

Yesterday the world learned that in January the United States government killed an American and an Italian hostage in a drone strike in Pakistan.

“As president and as commander in chief, I take full responsibility for all our counterterrorism operations,” the grim-faced president told reporters as television cameras broadcast his words. “I profoundly regret what happened,” he added. “On behalf of the United States government, I offer our deepest apologies to the families.”
When it is suggested that the Neutrality Act ought to be repealed so that private persons can go about fighting terrorists and freeing hostages, supporters of the Neutrality Act counter that privateers would not behave with due care and that innocent parties would be hurt. But in fact, the commander-in-chief of the United States is immune from prosecution when a drone hits a civilian. The same would not be true for a private party. Privateers would be much more careful to hit only intended targets.

Tuesday, April 21, 2015

Free Enterprise, Capitalism and The Panic of 1819

There is an enormous difference between free enterprise and capitalism. In today's culture, those two systems are conflated, and this causes misunderstandings between and among people who might otherwise have found that they have common ground.

Image from the Wikipedia

Free enterprise is an economic system where  people are allowed to come to agreements and reach bargains amongst themselves without government interference. Free enterprise says nothing about whether businesses are small or large or whether capital is concentrated or diffuse.

Capitalism is an economic system where large amounts of capital are concentrated in the hands of a few controlling interests. Those who control the capital might be corporations or the government. They are usually not individuals. But either way, capitalism says nothing about whether people are free to arrive at their own bargains under terms agreeable to themselves.

It is theoretically possible to have both free enterprise and capitalism at the same time. It is also theoretically possible to have capitalism without free enterprise or free enterprise without capitalism.

However, in practice, capitalism tends to move a country away from free enterprise, as when only a very few control the means of production, they are able, in a democracy,  to pass laws that favor themselves and hurt the competition. In practice, in order for free enterprise to remain stable, a more diffuse dispersal of capital is optimal.

For independent people even of very modest means, it is important to be able to make business decisions unfettered, so what they really want is free enterprise. For others, industrialization implies capitalization, and industrialization creates more goods and feeds the masses, so they favor special legal breaks for corporations. However, when they see what inequality is brought about by this system of capitalization, they start crying out for redistribution.

In the 19th century, the United States moved from being a country characterized by free enterprise to becoming an industrialized nation whose economic system involved allowing a few interests to control more capital. The means whereby this happened was the spread of corporations.

Corporations are legal entities whose investors enjoy limited liability. This means that the corporation can cause harm to others, but the stockholders cannot be held accountable for more than their individual investment. Due to this lack of accountability, investors cede control of their funds to a few individuals who run the day to day business of a corporation without  owning the capital that they control. When things go smoothly, everybody is happy. But when things go badly, you get massive economic downturns, like the Panic of 1819.

In Theodosia and the Pirates: The War Against Spain, Edward Livingston explains the change from free enterprise to capitalism to Jean Laffite.

Protectionism at home for certain businesses against others breeds protectionism from abroad through tariffs and embargoes, and what started out as free enterprise becomes capitalism, and the government is recruited to help protect unviable businesses from bankruptcy.

Today, the people who cry out to expropriate the rich are really targeting individuals who own their businesses: the small family farm or ranch, the mom and pop store, the home seamstress or tailor. When they speak up in favor of the estate tax, they forget that corporations never die, and that if families lose their property every time a father or a mother passes away, then very soon all businesses will be run by large corporations, and nobody will have any choice but to be employed by corporate conglomerates who lobby the government for protection. Then  prices and wages will be fixed by government fiat, and goodbye free enterprise.

Jean Laffite did not want that result. He was against wage slavery. How about you?

Related Articles

The Corporate Entity

Edward Livingston

Saturday, April 18, 2015

The Inheritance of Jean Laffite

Many of the people interested in "pirates" today enjoy little outings to search for hidden treasures -- real or imaginary -- that they believe the privateers of yesteryear may have buried -- coins or gold and silver trinkets under the ground in a big chest  in some remote spot, placed there just so that centuries later some eager tourist would be able to find them using a metal detector and a shovel.

According to Jean Laffite, though, when a privateer had processed a prize, it would be converted into specie, and the money was used first to pay off all outstanding debts, to reward every crew member for his service under the contract that they had signed, and lastly what remained was re-invested or saved in a bank account.

Jean Laffite describes how the next day after his elder  brother returned with his first prize  was spent with bank authorities
From this article

Jean Laffite was not necessarily all that rich even during the heyday of his privateering ventures in Barataria and in Galveston. It is estimated that the gross income at Galveston for the entire operation was about $400,000.00 per year. But whatever the exact amount may have been, when he retired, he had saved away a goodly sum, which in time was given over to his children.

When he retired in 1823,  Jean divided his estate in two parts. The first he shared equally among the three children born to his first marriage, who were now adults. The other half he used to found a business in Missouri, from which he made a living until close to the time of his death. What was left of that half was later inherited by his second wife and their surviving son. What do you think would have happened if there had been an estate tax in the US at the time?

Today on Facebook someone was complaining that republicans in the house had voted to repeal the estate tax. When I said that this would allow more people to hold onto the family farm or business, she replied: "This tax only applies to billionaires."

Is there a tax that only applies to billionaires? I wondered. After all, there are only about 526 people in that category in the United States. As far as I recalled, the estate tax applies to many more people than that. The 2015 exemption for estate taxes is only $5,430,000.

I asked my friend if she was in favor of repealing the Regular Estate Tax and there was just some other Estate Tax for Billionaires that she did not want repealed. It turned out that my friend was confused, and she did not distinguish between a millionaire and a billionaire.

In today's world, people of very modest means might be termed millionaires, people who in the grand scheme of things are much less rich and powerful than Jean Laffite. Over two hundred years of inflation will do that.

Dairy Farm Ad from

In 2015, 5.9 million dollars is what it costs to buy a 150 acre working dairy farm with the capacity for 600 cows. I don't think it even comes with the cows, but it does come with a four bedroom house and 2 1/2 baths -- hardly a palace. It comes with no employees.You have to do all the work yourself.  I am not sure how many people need to work there for how many hours to make it pay, or what the gross annual income from such a venture would be. But my friend believes that inheriting such an operation would be a windfall, just like winning the lottery, and that it should  be taxed in the same manner as winning the lottery. And then she accused me of believing in social Darwinism and not caring about the poor.

What would Jean Laffite say? For that matter, what would Karl Marx say? Didn't he believe that the workers should own the means of production? How can a dairy farmer own the means of production, if it gets confiscated every time he leaves it to his son in a will?

Here is an excerpt from Theodosia and the Pirates The War Against Spain that deals with this issue.

Do you object to wage slavery like Jean Laffite? Then you can't be for an inheritance tax that divests people of the ownership of the means of production.

Thursday, April 16, 2015

Selling for Cash

The American Revolution was all about taxation. The War of 1812 was also all about taxation. Jean Laffite was on the side of ordinary consumers, as he offered bargain prices. People went to his yard sales to buy goods at a price below that which was paid in the stores. Some of the goods had been looted from enemy British ships, that is true, and some of the merchandise had been smuggled in, despite the Embargo Act, and none of it paid proper duties to the local authorities, and this angered other merchants who did deal with the enemy, despite the Embargo Act, and offered similar goods for a much higher price. And to add insult to injury, the Laffites sold their goods for cash!

From Page 321 of  Theodosia and the Pirates: The Battle Aganst Britain

Jean Laffite sold things for cash. Some merchants complained that this was not fair. He was depleting the specie supply! But what were they really complaining about? Established merchants do not want competition from people who do not have their overhead.

Today, brick and mortar stores have been fighting sales on the internet. In my state, I can no longer be an Amazon associate because of the taxation laws that have been passed. And in some states, the government has moved to outlaw cash sales outside a regular store. Who benefits? Not the consumer.

In Louisiana, it is now illegal to buy and sell things for cash at a yard sale.

Supposedly, this is meant to prevent the sale of stolen goods. But everyone knows that it's all about the sales tax that big stores have to collect from the customer, and that small individual sellers have been evading so far.

When cash is outlawed, only outlaws will use cash! What is deeply ironic is that today cash is just worthless paper money. What on earth is preventing the people of Louisiana from going back to the gold standard?

Monday, April 13, 2015

Jean Laffite's Grandmother and Objections to the Journal

One of the reasons that it is difficult for some people to accept the Journal of Jean Laffite as genuine has to do with Jean's grandmother, who is identified in the Journal as a Spanish woman of Israelite descent.

According to the dedication to one of the Laffite family Bibles, she is identified as a Spanish Jew -- Juive Espagnole -- which might be another way of saying that she was Sephardic.

The idea that Jean Laffite could have had a "Jewish" grandmother seems distasteful and also perhaps unlikely to many admirers of the privateer. By the same token, people who identify themselves as Jewish may have trouble claiming the privateer as related, because his actions in life do not fit a Jewish stereotype.

But part of the problem with all this is that public relations have painted all people descended from those banished from  ancient Israel as Ashkenazi, Yiddish speaking ultra-conservative, religious fanatics or modern progressives with left-wing leanings. Nothing could be further from the truth. There are Jewish populations all over the world, including in Ethiopia and Yemen.

There is and was prejudice against non-Ashkenazi Jews in various Jewish subcommunities. Whether they are Sephardic, Yemenite or Beta Israel, they tend to be looked down on by Ashkenazi populations, for being too eastern, too dark or downright barbarians.

When I watched the video embedded below, about a young man named Yehye Nehari, born in Yemen to a mother of Israelite descent and kidnapped at age seven by ultra-orthodox Jews to live in New York where he was tortured for four years by being told he needed to speak Yiddish, because that is the language the Messiah speaks,  I wondered about his mother. Nehari arrived in Israel at age eleven, alone, without family, and in the video we meet him at the end of his Israeli  military service. His mother and sisters were flown in to see him. They had not seen each other for twelve years.

לא לפספס
Posted by ‎שוקי שיינפלד‎ on Monday, March 2, 2015

The mother is that rather young woman who is dressed colorfully in Yemenite clothing and is seen speaking into a cell phone in Arabic. She seems much less troubled or inhibited than her son. Notice how she doesn't let the Israeli men help her out of the van? See how confident and sure of herself she looks?

We think of women wearing eastern garb as being downtrodden or enslaved, but there is more than one side to that story.

The culture clash between the Ashkenazi progressive Zionists and the polygamous Yemenites they are trying to convert to Western ways is played to comic good effect in the movie Sallah Shabati.

In this movie, Topol plays the Oriental equivalent of the Ashkenazi character Tevye that he played in Fiddler on the Roof.

The Yemenite Jewish population still practiced polygamy when European Jewry had given it up in an attempt to fit in among their neighbors. While a European Jew had to give a dowry for a husband to provide for his daughter upon marriage, a Yemenite father expected to receive a bride price.

 Communism, popular in Europe at the time of the return to Israel, was unheard of among the Yemenites. The problems of the liberated, progressive woman who is an adult, yet unmarried and works without pay in the dairy barn of her kibbutz seemed strange in comparison.

The diasporatic population of ancient Israel went in many different directions. Wherever they went, they ended up looking very similar to the local population and speaking the language of the land in which they lived. There are even some who emigrated to China and still can be identified there today.

In all probability, Zora Nadrimal did not resemble the stereotype of the Jewish grandmother that we tend to have today in America. She was not from the German speaking  Ashkenazi populations. She did not know Yiddish. She was not part of a pacifist community that depended on an urban, industrialized society to exist. She did not teach Jean Laffite to turn the other cheek, and she was tough as nails when it came to seeing her grandchildren go off to war. Seafaring ran in her family.

But because of the current stereotypes, the stigma of the Jewish grandmother is one issue that prevents  admirers of Jean Laffite from considering the authenticity of the Journal, whereas the non-Yiddish values of the grandmother turn off most American Jews, because they cannot identify.

Sunday, April 12, 2015

Res Ipsa Locquitur

Today, I want to talk to you about the legal concept of res ipsa locquitur as it relates to the very common, ordinary conception of probability and odds. Now, probability is a mathematical topic, and I'm not talking about it rigorously here, but all people, inside them, have some kind of gut feeling about whether something is or is not probable. In the law, for instance, if somebody opens up a jar of jam that they bought and there's a human thumb in there, what the law would say is: "The thing speaks for itself" or Latin: "Res ipsa locquitur." Something is wrong. Somebody did something wrong. It's not likely that a human thumb fell from the sky and it wasn't anybody's fault, and it's in the jam. So the person selling the jam to the customer is responsible for there being a human thumb in the jam, even if we don't know how that thumb got in there.

 It's really the same thing that happens when your child has cookie crumbs all over his face and the cookies are missing from the cookie jar, but you don't know exactly how that happened. You could say: "Well, maybe the crumbs somehow fell on the child's face while the child was asleep, and the child didn't steal the cookies," but most would say the thing speaks for itself.

I had someone question whether I was really a person living in Missouri with a chimpanzee. You know, when we talk to people online, then we don't know everything about them, and certainly lots of other people hide behind masks, give themselves false names and pretend that they are something that they are not. But what are the odds that I am really faking all these videos with Bow and I really don't have a chimpanzee, or what are the odds that I don't live in Missouri and all the indications and all the pictures are false? I think that most people who have been following my blogs have a reasonable idea that, yes, Bow is real, and, yes. I am real.

The case for or against the authenticity of The Journal of Jean Laffite is likewise based on how likely it is that someone would want to go to the trouble to fake it to this extent. The man accused of forging the document was not a speaker of French. And the document itself is not simply in French, It's not Parisian French. It's not the kind of French you learn if you are studying French. It has Spanish words in it. And there seems to be evidence within the document that it was written by someone who was as fluent in Spanish as he was in French, who was probably brought up not in France, but in one of the French colonies,and who had the background that Jean Laffite had. So... Yes, it could be faked. But what are the odds that in the twentieth century someone was able to do that kind of faking?

Today, in the world of linguistics for someone to appeal to an argument of res ipsa locquitur is considered unscientific. But in the world of philology of Sir William Jones, who lived from 1746 to 1794. it was quite common to appeal to exactly that.

He is often quoted as saying:

The Sanscrit language, whatever be its antiquity, is of a wonderful structure; more perfect than the Greek, more copious than the Latin, and more exquisitely refined than either, yet bearing to both of them a stronger affinity, both in the roots of verbs and the forms of grammar, than could possibly have been produced by accident; so strong indeed, that no philologer could examine them all three, without believing them to have sprung from some common source, which, perhaps, no longer exists
So what he is really saying is: The thing speaks for itself. Res ipsa locquitur.

I have no doubt whatsoever that the Neogrammarians were in fact correct, and the IndoEuropean languages did spring from some common source. But it could have been formalized a great deal more. And today when somebody presents the same kind of circumstantial evidence -- and that's all it is: circumstantial; they were not there, they didn't see the languages spring from some common source; they merely surmised that it could not have happened by chance that so many roots were the same in all of those languages... So, today, if I point out that all of the IndoEuropean languages have a common source for their copula and their pronoun, and I can go to specific languages such as Sanskrit or Latin to show this, or I can go to a reconstruction of ProtoIndoEuropean and show that the root for one of the copulas is very similar to the roots of many of the pronouns, I can do that, and I can show that to people, and they'll say: "You know, I think you're right. But how would you go about proving it?" Well, my goodness! How did William Jones prove it? How did the neogrammarians prove it?

Actually, I think we are all appealing to the same gut feeling of res ipsa locquitur,  which can in fact be formalized, because we've got a finite number of contrasts, and we've also got a finite number of combinations, and so then we can ask ourselves: What are the odds that these two forms would be this similar? Because this is really finite math.

Saturday, April 4, 2015

Do You Have to Be at Home to Homeschool?

I was reading a blog the other day in which a mother who devoted her entire day to homeschooling her two boys felt overwhelmed, and she did not seem to be able to accomplish anything else in her life.

I thought back to the time when I was home schooled by my own father, from age thirteen to age sixteen. My father did not stay home to homeschool me. He continued to work. My mother was the one who stayed at home and prepared the meals and made sure that the household ran smoothly. But my mother was not my teacher. She did  not supervise my lessons or grade them or do anything that pertained to my school work. She did prepare my lunch, and she took care of my much younger brother all day. But my father was the headmaster of our school, and he taught all the classes, except for English. Because he was not a native speaker of English, he delegated that task to an English teacher who came by once a week.

                                                     Me in my home school T-shirt
                                                     Our school was named after the Israeli poet

Once a week, on Sunday, my father would have a long teaching session with me. Sometimes he was quite frustrated with my lack of talent in mathematics. Sometimes I was quite frustrated by his uncompromising teaching method that did not adapt to my limitations. But even though I did not accomplish everything he had hoped for me, the homeschooling was not a complete failure, as I was able to gain knowledge of history and languages and literature that is far greater than most American students get in high school. At sixteen, I began college.

Whatever regrets my father may have had about the homeschooling experiment, his entire self-worth was not tied into it, as he never gave up his life's work to engage in it, and he continued working on many other projects, both at his place of employment and at home, while he was also running our little home school. He was not so overwhelmed that everything else fell by the wayside. And as a result, I also did not see him as exclusively my teacher or caretaker. In fact, even when he was my only teacher, he was never my babysitter.

I got to know my father as a person, and I did not judge him solely on his success or failure as a teacher -- or as a parent. I was very much aware of his other accomplishments

                                          My father and I at the airport with one of his planes
                                          Aza, our dog, is careful as she approaches.

The same thing, I believe, was true of the relationship of Theodosia Burr with her father.

Burr directed Theodosia's studies while serving in the Senate and was always correcting her compositions, even from a distance. However, his duties as a father did not keep him from following other pursuits and having a career of his own.  He was not so overwhelmed by directing his daughter's studies that he could accomplish nothing else.

One of the problems with today's conception of homeschooling is that it attempts to replace the public schools, and the public schools keep students occupied all day long, because one of their main functions is to babysit children, replacing the stay at home mother or nanny, more so than the tutor or the father who directs a child's studies while doing something else, too.

Parents do not have to be nannies in order to be good parents. Those who instruct their children do not have to stay home, and even if they do stay home, they can follow other pursuits. A teacher, to be a good teacher, does not have to keep a child occupied all day long. Even a mother who stays home is entitled to some time to herself. But in order to let the mother have that time, you also need to loosen the reins on the children. They need to have some free time, too.