According to Glenn Reynolds: "Liberty Dog is a minarchist libertarian with Objectivist tendencies, but I can't even get my dog to crap outside."

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Tuesday, April 12, 2005

Incremental Freedom

Virtually any person with a basic understanding of money is familiar with the term "compounded interest." They may not know exactly how it works, but they understand that it is a good thing and helps their money grow.

Without trying to get too overtly technical, let's take a look at this in equation form. In order to keep it as simple as possible, we will assume a compounding frequency of 1 year. We also need to first define the variables of the equation:
    P is the principal

    r is the rate of return (expressed as a decimal)

    n is the number of years of the investment

    FV is the future value of the investment

OK, now that we know that, let's look at the equation:
FV = P(1 + r)n

Now let's bring it home by throwing in some numbers. We'll go with $10,000 invested at 7% for 30 years:
FV = 10,000(1 + .07)30 = $76,122.55

This is simple enough right. Now let's look at it with an annual addition, that is, we make a yearly addition to our principal amount in addition to the interest gain. In order to do this, we need to add an additional variable:
c is the amount of the yearly contribution

Now bear with me here because this equation is somewhat more complicated so we are going to use a little math trick called "summing a geometric series," to keep it as simple as possible:
FV = P(1 + r)n + c[((1 + r)n + 1 - (1 + r))/r]

Now, let's take that same $10,000 invested at 7% for 30 years and make a yearly addition of $1000:
FV = 10,000(1 + .07)30 + 1000[((1 + .07)30+1 - (1 + .07))/.07] = $177,195.60

Assuming I made no math errors (would someone double check that for me?), that is quite a nice increase over the one time investment.

By now, you are probably wondering what all that has to do with incremental freedom (the topic of this post). It has everything to do with it. Let's rewrite the variables in terms of freedom:
    CF is the current amount of freedom we have

    d is the increased desire for more freedom once some freedom has been tasted

    n is the number of years of the investment in incremental freedom

    FF is the future amount of freedom we will have

    i is the amount of freedom added each year through incremental steps

So now we have the equation for what every libertarian wants, future freedom:
FF = CF(1 + d)n + i[((1 + d)n + 1 - (1 + d))/d]

I point this out because, just as everyone knows that the way to make real money through savings is to combine the effects of periodic savings with the effects of compounded interest, libertarians should know that to obtain freedom you must add to it a little each year and build it up with the increased desire for freedom that will come as the veil of a century or more of creeping statism is lifted. This makes sense from a economic standpoint, right? You work hard, save your money in an interest bearing account and it grows. Why should we look at freedom any differently?

Unfortunately, too many libertarians (including the LP) want to take a different approach. They sit around like a white trash family in a Louisiana trailer park waiting to hit the Power Ball. They make extravagant plans about what they will do with this freedom jackpot, tell everyone how great it will be and quickly let their friends know that they are stupid if they don't buy tickets too. Of course, their numbers never seem to hit. But nothing changes. Instead of working hard and saving, those idiots down in the trailer park keep buying Lotto tickets and complaining the government isn't giving them enough handouts. Likewise, the libertarians refuse to see that the incremental way is the only one that will work. The government is not going to give us more handouts in the form of increased freedom. There will be no Freedom Ball jackpot headed our way.

Those that wish to increase government control over our lives figured this out a long time ago. They have been working for decades to increase the power of government, slowly doing so bit by bit, year after year. They knew that to do it all at once would only lead to a violent uprising against them. People, like animals, do not just become domesticated over night. It takes time to accustom them to their new masters and to give up their wild ways. Conversely, people domesticated by government handouts are not just going to give them up to go live in a free market. They have to be weaned just like a domesticated animal being returned to the wild.

People need to be taught the tools necessary for them to survive on their own in a free market. They need to learn critical thinking and self-reliance. It takes time to learn these skills otherwise, when they are suddenly freed but cannot take care of themselves, they move back towards what they have always known.

Take a look at Russia; it is happening there as I type this. Even though they tasted the sweetness of freedom, their inability to thrive in it is causing them to allow Putin to move them back towards the comforts of government control they have always known. There will come a time, however, that those born in freedom will violently fight to keep it. Much blood will be shed.

I don't want this for the US. I want our move to freedom to be everlasting. That is why I want to move in increments towards freedom rather than waiting for the collapse or violent uprise that will eventually come from our continuance on the current path.

The Neolibertarian Network

Copyright © S Michael Moore 2005