So if you really want to ruin someone’s day, drive in the left lane at about 50 miles per hour. They will be grumpy for three days straight, I assure you.

I was telling this story to one of my South Carolina friends—how upset people from Connecticut get about this, and how people from South Carolina basically drive however the hell they want—and he said ruefully, “Freedom…”

He’s a guy who perhaps likes lots of rules to organize society, and perhaps he’d rather live in a world where some law governs how you conduct yourself in every aspect of your life, including how you drive. I tell you what, after growing up in Connecticut and then spending the last six years in the South, I’m enjoying the freedom, even if it means I occasionally get stuck behind some idiot.

These days I’m very skeptical of anyone who calls him- or herself a utopian, a person who subscribes to the idea that you can somehow nudge people into doing this or coerce them into doing that and create this ideal society where nothing bad ever happens.

Remember the movie Minority Report? You can create a world without crime, but what would that world look like? It would be horrifying. You can make the argument that there is actually an optimal level of crime. I would rather have a little crime than the oppressive law enforcement it would take to get zero crime.

Bill De Blasio recently lowered NYC speed limits to 25 miles per hour in an effort to lower traffic fatalities to zero. He called it Vision Zero. Have traffic fatalities been reduced? Actually, I haven’t checked. But there are tradeoffs with everything. People get to where they’re going much slower, which has an economic impact—that nobody talks about.

There will always be car accidents. There will always be deaths from drug overdoses. There will always be crime. People will suffer and die because of stupid stuff and because they are stupid. The world is not a perfect place—in fact, I prefer it to be a bit untidy.

Economic Frrrreeeeeddoommmm

There have been some startling developments in the past few months. Like, did you hear the talk about getting rid of $100 bills?

It’s not just C-notes. 500EUR notes in Europe, 1,000CHF notes in Switzerland—everywhere people are talking about getting rid of large-denomination bills, because… some people use them to evade taxes or to commit crimes. You don’t pay your drug dealer with a credit card. So the thought is, get rid of the large-denomination bills and crime goes away.

This is scary. Part of economic freedom is the ability to transact anonymously. Take the extreme example where cash is eliminated altogether. Everything goes on a credit or debit card. Your whole purchasing history is stored on the Internet. Well, if you’re not doing anything wrong, you have nothing to hide, right?

Part of freedom (including economic freedom) is the ability to do bad things. Do you want to eliminate the option for people to do bad things, or do you want to give people the choice to do the right thing? All morality is meaningless if people are given no choice of whether to behave or misbehave. This is a deep philosophical issue.

Again, some people think a perfect world is a world without crime, but that’s not true. A perfect world is where people have the ability to commit crimes, but don’t.

But this talk about large-denomination bills is really gaining momentum, and honestly, I think it is at least half responsible for the run up in gold prices over the last couple of months.

Think about it—in a world without cash, gold (and silver) becomes the currency of anonymity. You can see how this will play out: they ban cash, people start using gold… well, now we have to make it illegal to hold gold, because gold is the money of the underworld.

How much will gold be worth then?

This also speaks to the need to hold gold in physical form, not in “paper” form. I’m not one of these people who distrusts securitized gold or gold futures, but if it ever becomes illegal, holding ETFs or futures will do you no good whatsoever.

I actually think it’s best to hold physical gold as well as “trading gold.”

Unintended Consequences

I read an article that all the anti-terrorism rules placed on the banking industry have turned out to be completely counterproductive. When dirty money was in the banking system, it could be tracked. Now that people have turned to cash and barter, it can’t be tracked, and we are actually less safe.

This trend toward pushing people outside the banking system is a very dangerous one. When people are underbanked, their social mobility is limited, to say the least. They work under the table, they don’t pay taxes, and they can’t contribute to Social Security. Whenever I make large deposits in my bank, it feels like I am going through airport security. Everything I do is viewed suspiciously.

The upshot here is that no matter how much social engineering you perform, you will never get people to behave, and the rules only make things worse for the people who actually obey them.

Every law passed to fix something over here creates unintended consequences over there. Then new laws are passed to counteract the old, bad laws, which increases complexity, which increases the need to pay people to understand the complexity, which creates a deadweight loss. And people wonder why we grow at only 2%.

One of these days I will run for public office, maybe. I will campaign on a platform of doing nothing.

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