If you haven't yet read Alongside Night, this is an Afterword which gives away plot points.
Go to Part One.
How Far Alongside Night?
by Samuel Edward Konkin III
This afterword first appeared in the 1987 Avon paperback edition. -- JNS, November, 1996
Samuel Edward Konkin III is the Father of Agorism, the
economic philosophy that inspired the Revolutionary Agorist
Cadre in Alongside Night. As editor of the longest-lasting
"purist" libertarian magazine, New Libertarian, and
executive director of the new countereconomic think tank,
The Agorist Institute, Konkin is attempting in real life
what Merce Rampart has accomplished, so far, only in my
imagination. -- JNS
Two thousand dollars for a taxi ride across Manhattan?
Underground shopping centers where the stores accept payment only
in gold? The Almighty Dollar so worthless that even the United
States Army won't take it anymore?
Surely this sort of paranoid fantasy went out with the
seventies?
Certainly, in the eighties of Reaganomics, low inflation,
and tax "reform," we don't have to worry about this economic
scenario anymore.
Or do we?
To answer that question, we need a quick look at economic
history.
In 1910, an economist named Ludwig von Mises had his
doctoral thesis published in his native Austro-Hungarian Empire.
It eventually appeared in English under the title The Theory of
Money and Credit.
On the face of it, this does not sound like the most
important event of the twentieth century, but it may very well be
to the science of economics what the publication of Einstein's
General Theory of Relativity was to the science of physics.
Mises set forth principles that explained the Roaring
Twenties and--two decades before Black Thursday--the
inevitability of the following economic collapse that would lead
to the Great Depression. Mises also provided the only set of
economic principles that could explain the "stagflation" of the
late 1970s. Other economic theories stated that this mixture of
inflation and recession could not exist and floundered when it
did.
Mises was no Nostradamus. Financial analysts and believing
entrepreneurs followed his "Austrian" theory in the teeth of
Friedman and Keynes concerning that "barbarous yellow metal" as
gold was to be legalized. They saw the price per ounce skyrocket
to $800, settle down to $300, and begin a steady upward climb.
His prophecy proved to be a valid scientific prediction and . . .
on the money. When a set of general principles is found, over the
long term, to be able to make valid predictions in a certain
field of knowledge, that field has qualified as a science.
In a nutshell, Mises's theory ran that if government
inflated the money supply, it would generate a boom. Since supply
follows demand, investments are made to provide luxury goods and
services for the boom time. But the inflationary money is only
"temporarily real." Price levels go up everywhere, people find
they can't buy as much as they thought they could? cut back on
their consumption, and the demand drops, usually below previous
levels, because of squandered real goods. Luxury goods sit on
store shelves, which-causes businesses to cut back. Capital is
wasted, workers are in the wrong jobs. Luxury goods are sold off
below cost in going-out-of-business sales, and workers are laid
off.
This period of poor business and high unemployment is called
a depression.
Injecting money into the economy is like injecting heroin
into the body. A "high" results, but it's temporary, and a bigger
dose is needed for the next "high." Eventually, this leads to
overdose. If the government doesn't go cold turkey and leave the
money supply alone, the people come to expect a total
inflationary wipeout, dumping their money as fast as they get it
(or faster). Nobody wants it. Everyone knows it's not real.
Inflation has gone runaway, and this is known as hyperinflation
or crack-up boom.
What an economy looks like in the last stages of the
overdose is portrayed in Alongside Night.
Historically, this has happened repeatedly: in the American
Revolutionary War, in the French Revolution, in the U.S. Civil
War, in Germany in 1923, in China in 1949, in Brazil in 1964, and
so on. Currency collapses either started revolutions or pushed
them over the top. That's as far as Mises's economic predictions
went.
In the late 1960s, Mises's economics spread through the
radical movements. Radical libertarians, having outright rejected
or abandoned Marx as demonstrably false, not only latched onto
Mises but took notice of an effect that conservative "Austrians"
feared and spoke of only in hushed tones: the economic theory
predicted, more or less accidentally, the collapse of an economy
and hence political revolution.
But what a place for a radical to start. The government, by
its own stupidity, was going to bring about a revolution. In the
early 1970s, it certainly looked like it. The radical
libertarians stood on the shoulders of the giant Ludwig von
Mises. And in 1972, a young student radical named J. Neil
Schulman clambered up there with the rest of us.
In 1973, the United States of America, through the Federal
Reserve Board, appeared to have lost control of inflation. The
libertarian Right was turning to survivalism and heading for the
hills--these are the "brownies" of Alongside Night. We of the
libertarian Left looked forward to the insurrection following
economic collapse as a rare opportunity. The socialists had
smoked pipe dreams of American proletariat arising for a century;
now they were down to ashes. The libertarian free-market Left saw
Mises's infallible indicators predicting the stripping of
everyone, including the middle class, of their wealth: wiping out
their bank accounts, annihilating small businesses and workers'
wages. Now this is what would finally bring comfortable,
complacent Americans into the streets. But when?
In 1973, Ludwig von Mises died. Austrians, neo-Austrians,
Left and Right Austrians outbid each other with predictions of
the righteous monetary thunderbolt of the market at last bringing
justice to the statists (and profits galore for those who went
"long" on gold and silver). No one but Mises was sufficiently
respected to judge, and he was gone. The cautious Austrians
claimed that predicting the timing of real-world events was one
of those things Man Was Not Meant To Know. But the rest of us
remembered Mises's success and plunged ahead.
Judging from events such as Nixon's imposition of wage and
price controls (a truly fascist concept), I foresaw a wave of
repression as early as 1975 as inflation went runaway.
Neil was relatively cautious and decided to play it safe,
setting his portrayal of the economic collapse of America at
least several decades away.
Alongside Night is terribly accurate. Whenever the American
crack-up boom happens, few libertarians would disagree with his
outline of the scenarios. But Neil went one step farther than
most of the libertarians of the time. He integrated the new
science of countereconomics and the economic philosophy of
Agorism, which I had only begun to develop in 1974.
Agorism is the view that, regardless of whether or not it is
sanctioned by the state, free trade conducted morally is still
moral. Crack dealers, midwives, porn pushers, truckers using CB
to outrace Smokey, coyotes, and tax evaders are to be regarded as
truly free-market businesspersons and moralists; law- and
regulation-abiding types are seen as wimps; and tax-subsidized,
loan-guaranteed corporate heads are seen as a bunch of fascists.
Agorism is the only philosophy that explains why, in an East
German alley, a hooker and a bible smuggler ducking into the same
doorway to avoid the police not only won't turn each other in but
are also both acting right and proper.
Sure, if it ever happens, Alongside Night is right. In
other words, it is "hard" science fiction by virtue of its use of
a theoretical science to predict real-world events. But how
likely is it, when we live in (what appear to be) noninflationary
times?
In 1975, the legalization of gold acted as a safety valve on
the economy. And with the Vietnam War over, the government's
pressure for spending money it didn't have (additional taxation
through inflation) was gone, at least temporarily. The government
of the United States of America took some of its medicine and we
headed into a depression instead of hyperinflation.
In the early Reagan years, the inflation continued--but
completely anticipated. It even became lower than anticipated
because of bankruptcies, liquidation sales, and unemployment.
Unions are still collapsing as an aftershock but, brag the
Reaganites, at least we brought down inflation.
The mechanics of what happened are still fairly complex and
controversial even among Austrian economists, but it is clear
that the Reagan administration "bit the bullet" by lowering the
rate of inflation and accepting the depression. The money supply
was fine-tuned so that the fall in prices resulting from the
depression was matched by the continued increase in the money
supply: that is, canceling out most of the price increase usually
resulting from inflation.
But the quick fix has run its course. The American dollar
edges downward in world currency markets and drags along foreign
banks and currencies that accept American inflation as an
export--so far. Gold continues relentlessly upward in price long
term. And still the federal budgets and their deficits, now past
two trillion, grow higher and higher.
The fundamental principles of Austrian economics remain in
place. And what they predict is still valid. Either the United
States will give up monetization of its debt and live humbly with
what it can extract from taxation alone, or the scenario of
Alongside Night will come to pass.
When the next clamor for massive government spending arises,
whether for a Greater Society or Star Wars defenses, the money
will have to roll from the presses, the consumers will be caught,
the inflation will be anticipated ever higher, and the
hyperinflation scenario will be in place again. But with one
difference: the last inflation spree left a permanent part of the
economy underground, not just pimps and pushers but straight
businessmen and their workers who left the "aboveground" economy
for the countereconomy. When the feds inflate, they confiscate
from a smaller base, and as they inflate, they push more and more
entrepreneurs Agorist-ward--and have less and less tax base and
fewer and fewer victims.
With fewer people accepting the same amount of money, it
buys less. That is, h inflates--even without the government doing
it The people going countereconomic take the decision out of the
hands of the state and force a crack-up. But this time it's only
the statists themselves upon whom the consequences are visited.
And that is the scenario of that profoundly moral novel of
justice finally served, Alongside Night.
When? You decide, dear reader; but you are now well armed to
see the signs and know what actions to take. Thanks to Ludwig von
Mises, a small band of rational revolutionary students, and J.
Neil Schulman, artist.
Interested readers may find out more about agorism at the
Agorist Institute Website at
http://www.agorist.org/.