Basic Budget and Appropriations Reform

Congress has only completed the full budget and appropriations process on deadline four times since 1977. It becomes more challenging in an election year when many members want to avoid politically sensitive issues — such as healthcare and the environment — which could scare off voters.

As we get closer to the Sept. 30 deadline and the Nov. 8 election, Congress will continue to forego the budget process. Instead they’ll pass a stopgap extension of current funding levels that could ignite another fiscal crisis, or government shutdown, later this year. It is the annual “Continuing Resolution” authorizing continued agency and payroll spending, and Social Security checks, without new Congressional action for the rest of this year.

    “Deadlines? We don’t respect no stinking deadlines!”
    – as might have been said in a famous Bogart film.

The majority, 73%, of American voters are against these kinds of shenanigans and don’t want Congress to increase spending. They know there ought to be a limit on how much money can be put on “America’s credit card.”

The folks in Washington — the president, Congress, Democrats, Republicans — they’re all to blame. But they don’t seem to care. It’s spend, spend, spend; we’ll spend what we want. The budget — what budget? — be damned.

An advocacy group sends out “Uncommon Wisdom Daily,” A Division of Weiss Research and write under the name “Uncommon Wisdom Daily Team.” Thank them for the opening four paragraphs of this message.

The Budget Process is Awkward – and Unnecesary

The United States Congress did not adopt a fiscal year (July 1 – June 30) until [tk] 1890. The law that set it up said the president would submit an annual budget for Congress to consider. The budget law has been changed since then but the idea of “budget planning” is still at the center.

Budget planning is the technique of private business and individuals to lay out numbers for spending and cash inflow for a future period. It is a different process from government fiscal planning. An individual prepares a forecast budget to use both to see how future payments might be divided and also to watch out for new things that violate planning assumptions. In other words, budgets are used to discover as you go along how far you are deviating from your plan.

Government budgets cannot perform that last function. Since appropriations are a law, Congress does not have any time “to modify” the spending except to increase it frequently during a fiscal year and regardless of results.

A Modest Proposal

I was fortunate to serve as a Senate staff member for a Senator on the Budget Committee, 1987-90 (Symms, R-ID). I watched the process and generally it is a systematic analysis and focused way “to plan” the new fiscal year. It controls appropriations, which come later from different committees. But it is never really followed.

What happens are continual “emergencies” and “supplemental” appropriations during the fiscal year, on-going, and at the end of every few years also a Debt Limit Increase confrontation.

Each September 30, the fiscal year ends. Appropriations Laws all expire. Agencies cannot keep paying their staff employees, and beneficiaries stop getting payments on October 1. That never happens because Congress always passes a “Continuing Resolution” to keep on keeping on as if the prior budget appropriations had not expired.


My proposal is to stop at that enactment.
Let the “Continuing Resolution” become the full law governing appropriations for one more full year.

This gives time for the non-money side of Congress, all those Members who do not serve on the Budget Committee nor the Appropriations Committees, also to take some role in supervising and reviewing what their money is actually buying.

If a program is not performing, it deserves NO increase, and if the dollars appropriated shrink due to Federal Reserve policy, let that be the rate of cutting real spending.

Supplemental appropriations are going to happen anyway, for other programs. There is time to look at all the programs, EVERY YEAR, and to evaluate ex post facto how much to reward them for performance.


Government Accounting with Gold Grams

Questions have been raised:
Why the “gram of gold”?

Discussion: When the Unit of Accounting is, itself, a “policy instrument” there is no independent element for the voting public to look at, to rely upon, and specifically the buyers of US Treasury bonds should know they are being promised something in the future that is more than just “a policy instrument” of value.

Quote from Isaac Newton

    “Gentlemen, in applied mathematics you must describe your unit.” He instructed the Royal government.

Newton fixed the gold content of the British coinage, which is unchanged today although in 1931 the “paper pound” (GBP) became the UK government’s accounting unit and domestic legal tender.

[Newton citation from Isabel Patterson, The God of the Machine (1943), who was making a similar claim about unreliable “paper” (policy instrument) money.]

The gram of gold is a unit of mass (weight; density) and the Unit of Accounting would be just referencing something from the physical universe. “Gram” as a Unit happens to be convenient as the name of a measurement, and in financial affairs, “traditional” in the sense of gold having been so long used as money (along with silver). Social conservatives may insist on “troy ounce” and apothecaries measure, but those “names” are subject to “re-definition” moreso than the designation of mass in the Systeme International.

Why Not a Tabular Standard, with a diversified group of commodities?

Discussion: Proposals for a tabular standard have been around since Stanley Jevons and Simon Newcomb, and have never been taken seriously by the world of finance, or governments. Perhaps tabular standards are the “most rational” method of establishing a Unit of Accounting. I particularly like the Greenfield Fama Hall (GFH) commodity concept, which Greenfield and Yeager analyzed. The best part would be the government would not issue any of the “currency,” which might be created by banks for that Unit of Accounting, privately as credit (deposits).

When the government “defines” a Unit of Accounting for itself, which it uses in the bond market, then the private sector will create deposit accounts and private loans in the same Unit of Accounting. This is just “monkey see, monkey do” anthropology. The banks would also have assets denominated upon maturity in that Unit of Accounting, so their new credit liabilities would be “backed” sufficiently to promote “confidence.”

    1. When the “dollar” is just a “policy variable,” there is no basis for long-term confidence in it. No financial planner can tell a client, “you will have ‘X-value’ in the future.”


    1. Who knows?


    Its value is a “policy variable,” and policy can change.

If the payments system can already accommodate Visa and Mastercard, with FX transactions seamlessly executed, different Units of Accounting are already not any serious problem for a modern economy (and probably not for more primitive systems, where traders are very wary and alert). Local pricing would probably always be done in traditional, familiar customary (“dollar, euro, yen, yuan”) units and labor wage rates would optimally be local also to match the local pricing practices. Tourists don’t seem to have many problems with the payments system if they carry plastic.

So, “Why the Gram of Gold” and it is because it is a Unit that can serve for Accounting, and be independent from any government policy.

Why Not Fix the Dollar-price of gold?

Discussion: The fixed weight definition of “dollar” from 1900 was 1.5046 grams of gold, until F.D.R. debased it and Nixon abolished it in 1971 (it was a “policy instrument”).

Fixing the amount of gold defining ‘One Dollar’ is not technically different from defining dollars in terms of a composite of other commodity prices, as in a tabular standard, but a single tangible referent is “more concrete” in people’s minds, which begs the question: “Why not just use the weight of the metal to which the government’s Unit of Accounting is supposed to refer?”

The answer is that “defining” the “dollar” as something else leaves it as just a “policy instrument” with a value that can change with new policies. [Politicians and crony capitalists want the “flexibility” of that option.]

    • What kind of “confidence” is that supposed to inspire? Does the motto on the paper money say “In God We Trust” because we cannot trust the money itself, or the government that issues it? [motto was first used in 1862 on paper currency; the Greenbacks; “god” instead of “gold” or silver to be trusted]

[When will another president, like F.D.R. and Nixon, decide to break the promised, fixed XAUUSD exchange rate?]

My favorite acronym: F.R.A.U.D.= Federal Reserve Accounting Unit Dollar.

The Optimal Currency Area for Capital Markets is the World as a Whole

To step outside the question of whether a government should have a monopoly of some currency area, what might be an “optimal” currency area? Some things are traded mostly locally, and others are traded mostly globally. It might be useful to have a world-wide, single Unit of Accounting for capital assets and corporate balance sheets, particularly if the company has multinational operations.

The existing system of “national currencies” drives the current strength of the U.S. Dollar. But that is accidental.

To sensibly discuss and compare different values, a “standard” for measuring changes in relative financial values is essential: We have the SI for standards in all other fields, except accounting and finance. Measuring length or weight is standardized. Measuring “dollars” is variable. Measuring the same assets in euro, pounds, yen, or yuan is even more fuzzy.

In a world of floating exchange rates, and flexible commodity prices, to use the free market price in any currency Unit of Accounting, measured against the continuously changing “exchange rate” of a gram of gold, allows both flexible exchange rates among different Units of Accounting and a firm alternative basis for balance sheet accounting – eliminating “money policy” and exchange rate uncertainties.

    Governments, of course, should be discouraged from “fixing” their paper to the gram of gold because that would prevent any beneficial adjustments in the local labor market from flexible exchange rates. Governments should be encouraged to issue long-term bonds denominated only in kilograms of gold, not in paper Units of Accounting.

A single common Unit of Accounting in the capital markets (“gram”) would facilitate international diversification of equity ownership and remove capital movements measured in that Unit of Accounting largely from impacting floating exchange rate values, since “exchanging money” would be unnecessary when “trading” financial assets denominated in gold grams. As gold grams displaced other Units of Accounting in balance sheets, showing historical cost of assets in “gold gram” units, demand for some paper Units of Accounting might decline.

Theoretically a single world capital market based on gold-gram accounting could eliminate any transactions or exchange costs (with technology, e.g. blockchain) improving market performance. Issuing US Treasury bonds in Kilograms of fine gold would represent a dramatic innovation in the financial world, because the slow roll-over of maturing US Treasury bonds financed by the Kilogram bonds would not affect private wealth by a problematic “fixing” of a gold price for “Federal Reserve Accounting Unit Dollars.”

Since “policy Units” of Accounting can “float,” A Unit that DOES NOT CHANGE is worthy of being used as a basic “relative-measure-referent” for Balance Sheet asset values (thus my recommendation for a SI referent, to the gram of gold and introduction of US Treasury Kilogram Bonds). The depreciation of paper makes balance sheet numbers over time less and less useful.

  1. The chemical element, Au, will not change (object permanence), and
  2. The measure of its mass in SI units will not change – by policy. The SI unit of mass is not a “policy variable.” It is ideal as the name of a Unit of Accounting for quoting and measuring relative prices for other assets. Offering the Kilogram bonds would establish a reserve asset for insurance, annuities, and private debentures. They would become the asset side of private balance sheets with liabilities similarly denominated.
  3. The exchange prices for gold in every other Unit of Accounting are available 24/7 as public information, in real time without delay or “statistical adjustments.”
  4. All the historical data needed for any tax calculations would be readily at hand.
  5. Any change in the future relative value of gold against other real goods and services is arguably more stable and predictable than government policy. As we wrote in my essay on financial planning,
      “We might not be able to predict the exchange rate of an ounce of gold vs. a pound of beef in 25 years, but it would not be a whim of imagination. I would be more comfortable thinking about coin vs. beef than about $100 today vs. $1,000,000 in 25 years, and wondering which would be more valuable?”

Although the Unit of Accounting is used centrally in the payments system – paying our bills by exchanging bankers’ debts – the “measurement function” of allowing balance sheet assets to be “historically-valued” over time, and traded, sold, or mortgaged is also critically important. Assets can be traded, and pledged for credit. Credit is liquid; most assets are not. All such pledges are made in the name of the credit-Unit of Accounting.

The “Flexible Gear” of Bank Credit

The “credit process” in action is the “flexible gear” in the economic system that Hayek discussed in The Pure Theory of Capital (1941). “Credit-money” spends itself just the same as “asset-money.” The trick is to assure it is honored in payments (a vanishingly small cost for someone with assets, connected to the ACH or card networks). Bankers know the risks and technology to assure payments are honored.

The Units of Accounting people may locally use (“euro, yen, dollar, yuan”) are not any difficulty, because they all exchange quickly with each other in the FX markets. The Visa and Mastercard networks, and others, seamlessly make foreign exchange conversions.

For its own payments and tax collections, the US Treasury has an Exchange Stabilization Fund (31 Stat. 5117) to be used for balancing foreign exchange, and that Fund could also be used to convert “dollars” to gold grams for internal accounting. The US holdings of IMF SDRs are in that Exchange Stabilization Fund, as assets held by the US Treasury, as well as other foreign currency and “gold certificates” issued by the Federal Reserve in 1934 when all gold was nationalized by Congress under F.D.R.

How to ‘Manage’ a $15/hr. Minimum Wage

The primary “practical” reason why a statutory Minimum Wage of $15.00/hr. is a bad idea is because some workers are “not worth” that much to some employer, who has to use the workers’ productivity somehow to get paid by a customer.

Employers discriminate against “losers.” They shun workers who do not meet minimum “qualifications,” which mostly the employers choose (barring race, et al.).

How to ‘Manage’ a $15/hr. Minimum Wage

Employers are not going to pay and continue to pay, after perhaps a trial probationary period, for an employee who “is not worth it.” But the “social welfare” aspect of the Minimum Wage seems to be outweighing, politically, the logic of economics.

How might a Political Economist solve this problem? It is clearly a problem for the School of Public Choice economists, of whom I am proud to have known some personally (Coase, Buchanan). A simple institutional structure might work here, to divide the “employment” part from the “welfare” part of the costs.

Under current law, every State has a “work training and unemployment compensation” system of some sort. Workers who apply for unemployment compensation after losing a job can apply for it but they have to attend training programs in most jurisdictions. It is a subsidized process.

Perhaps the solution is a structural reform, replacing the current Unemployment Insurance and job training programs.

Proposal for Handling the Minimum Wage

Let the Minimum Wage be paid to the workers directly by the State labor exchange, if they get their jobs that way. Otherwise no Minimum Wage shall be mandated. Employers do not have to pay any such thing any more, and we ought to hope the State governments follow this deregulation, and repeal their implicit excise taxes on hiring sub-par workers.

Employers Decide how much to Pay

Employers would submit a “bid” for workers, and the labor exchange would choose which ones to send for an interview, based on whatever they do “to train” workers about job-finding skills, and assessing their level of skill.

    Let the employers come to the State labor exchange to interview workers, or workers can be sent to interviews, and the employers would be inviting them. Guaranteed interview, and possibly a guaranteed job.

    The employer would reply directly to the State labor exchange whether s/he wanted to take on that employee for a trial 30-days and option to renew the worker for a year at an agreed fee (like a temp agency contract). The wage will be paid to the State labor exchange and the State would pay the worker his or her $15/hr. It would also do all the Social Security withholding, etc. including ACH compliance (Medicaid) and workers compensation, and any other local taxes on employers who hire workers.

The implicit Excise Tax on an employer, who hires workers whose productivity may be sub-par with experienced and better trained workers, would be eliminated – and paid by the taxpayers through the labor exchange “minimum wage” – as all welfare payments ought to be paid, not mandated on others to pay.

And . . . the Moral Argument

Finally, the primary “ethical/moral” reason why a statutory Minimum Wage of $15.00/hr. is a bad idea is because the government does not have any legitimate right to command an employer to pay any particular worker any particular amount that the worker has not earned that day.

But retired intellectuals like me can understand why most people want to survive in a world dominated by State laws. This “compromise” idea would give everyone a way out of the Minimum Wage issue, and separate (i) the “welfare” part from (ii) the wage an employer pays. [The social democrats get their “living wage” paid (social justice?) and employers get a more free labor market with no wage controls.]

The Philosophical Argument (phronesis)

It is precisely that “wedge” from the elementary supply & demand graph (the “burden” of welfare), imposed by the government on the private employer; this causes “unemployment.” Since the employer can choose not to hire, that law causes unemployment. [law of demand – demanders move upward on the curve, for a smaller quantity demanded] It is an implicit Excise Tax on employers who hire sub-par workers, thus fewer of those workers are hired.

Yet if we could divide the welfare payment from the wages paid by an employer, then “unemployment” goes away. Taxpayers would pay the “welfare” part of $15/hr. and the employer would pay to the State labor exchange what the employee is worth. The employer’s payments would be under a contract with the State labor exchange; it would pay $15/hr. to the formerly “unemployed worker.”

“Unemployment” goes away. That’s a good result. Employers might figure out how “to chisel” the system by bidding low to get a good worker, and pay the employee less than the $15 the taxpayer is stuck with, but why care about that? Workers get jobs, employers get workers to train, and social democrats get higher taxes “to redistribute wealth” without requiring employers to pay all those taxes themselves, which a mandated Minimum Wage like today’s does do.

Today’s Minimum Wage laws are just a form of Excise Tax on an employer who might hire workers whose productivity is sub-par compared with experienced and better trained workers. When we tax something, we get less of it. Stop taxing job creation.

Note: Nothing in this proposal would restrict direct employer hiring of a worker, and no minimum wage laws would apply when such “Excise Taxes” have been repealed. Workers who do not want the State $15/hr. wage could work for less directly with an employer.

Creating a New Currency


    Link: A review of Warren Coats’ new book.
    (see a list of his articles and books)


Stronger currencies despite central bank policies to weaken

Gold as a Parallel Currency Shows Promise in Foreign Exchange transactions, using the technology of a Blockchain.

Why Dollar-Alternatives Are Non-Starters, e.g. the SDR.

The Appeal of the Gold Standard

The appeal of the Gold Standard is that classic image of the Gold Coin in the minds of people. It is a concrete mental picture. Our paper money system is something else. People know the Federal Reserve dollars are slowly losing value (“inflating”). The gold coin you see in your mind’s eye is more than just a physical object; it is a belief in permanence, a belief in objective reality (and in some sense, “natural law” i.e. chemistry, mechanics).

31.1g AU coin
31.1g AU coin

Economists would want to promise a “Stable Price Level” as a monetary standard. It is not believable. The Federal Reserve cannot even “manage expectations” about their plans for interest rates in 2016. Seeking this elusive ideal, government “planning” crowds out financial planning by individual families and businesses, because “the language of future prices/values” becomes fuzzy. The ideal of their success – a “stable price level” – is not believable (another example, perhaps, of believing in unicorns).

    [ from the page on this site, “Gold as a Parallel Currency,” — continuing to “A Modest Proposal” — Gold kilogram 50-yr.Treasury bonds. ]

US Economic Growth vs. Rest-of-World

The graph below shows with a RED LINE the relative growth rate of the U.S. Economy and the BLUE LINE shows the relative growth rate of the Rest of the World’s economies. The connection is that foreign demand pulls exports from the United States for use in foreign countries. Imports are what Americans demand to add to domestic production to create U.S. economic growth. Imports increase when the economy grows, and they increase faster when the USA grows faster. (“Production” is an inclusive term meaning whatever increases individual standards of living and personal flourishing, even if it is a cheap toy from China “to produce” your baby’s smile.)

The RED LINE also shows what has happened to the CAPITAL ACCOUNT in the Balance of Payments. The Capital Account has been in consistent SURPLUS both because the Rest of the World demands U.S. Dollars in the form of U.S. Treasury bonds, but also because foreign nationals need to buy real estate and build factories in a country where the government does not confiscate wealth and infringe liberty as much as in, e.g., China.

The graph on the left side begins with the Smoot-Hawley Tariff of 1929-30. The stock market crash happened when the House of Representatives passed the bill in October 1929 and the Great Depression began (after a stock market recovery) the following spring of 1930 when the Senate passed and President Hoover signed the Tariff Act, dramatically increasing the tax Americans had to pay for anything imported.

Since the Rest of the World, particularly Europe, in 1930, could not so easily sell goods to Americans (who had to pay the tariff-tax on imports), they stopped buying large volumes of agricultural exports from the Midwest.

SAY’S LAW: Foreign buyers need to raise money to buy US goods, and if their own sales have been taxed to minimal, they no longer can pay US farmers.

That caused small banks in those small farm towns to collapse, which rapidly spread to collapse in the money-center banks. The rest of the story is well known. The Great Depression lasted over a decade. Thank you, government policy Hoover-F.D.R. “admininstrative state.”

How long will the Great Trump Depression last?

A Floating Exchange Rate World

I think we are living in a “floating exchange rate world,” in which we have lost visual control over what we might believe our assets and liabilities are “worth.” Value is hard to measure, and we Americans normally think about how many “dollars” each value might be. It is a yardstick.

I am studying how to trade in the foreign exchange spot market. It is interesting to me as an economist, to play with the numbers. I like to make lines and colored boxes on charts of daily movements in currency pairs. I watch the dollar-value of the gold and silver ounce, and also some curiosity items like bitcoin, oil, junk bonds, and the DXY. Then I look seriously at the currency pairs, and some of them are paired so we say one euro is $1.0624 (11/25) but others are priced inverse, just for convention and trading such as the Chinese 6.421 (11/25) for $1.00 USD. [update: 8/22 EURUSD $1.1320 and USDCHN 6.659]

What is your house worth? How would you find out? Is that a “hard number” or just a guess? What would a Chinese person think about the price of your house, if they wanted to buy real estate in the United States? We can see if you went to Europe everything would seem about 6 percent more expensive, generally.

We live in a floating exchange rate world, but “one dollar” is not like the “inch” on a yardstick, nor a “meter” in the SI. It is like rubber, and we know the dollar is shrinking continuously in value. The Fed says it is trying to diminish the value of dollars at 2% annually. So far their theory seems not to work very well. I believe the strong overseas demand for the USDollar is having a dominant effect; the USD as a unit of accounting, is strong as a safe haven, and because US Treasury bonds are payable in USD.

The great unified “Accounting System of the universe” has chosen the US Treasury bond as its new gold. But never take your eyes off of gold, because you have few other true references. Perhaps also oil, due to its importance and it is priced in USD. Watch OPEC for any discussions of using a different international Unit of Accounting for oil barrels, but so long as the trading in New York is leading the commodity-price methodology, the USD will remain “reserve currency” and the US Treasury bond will be the ultimate “reserve asset.”

What do they say at the end of some 1950s scary “invaders from Mars films? “Watch the skies.”  The danger of another 2007-08 can come again, in this puzzling financial universe of Federal Reserve interest rates near Zero for more than 7 years and quantitative easing, seemingly not to very much effect.

I claim the foreign exchange phenomenon explains much of the picture, but it could change very quickly. Watch the horizon for scary events. What if Donald Trump were sworn in as the 45th President of the United States in 2017?

Social Order and Political “Leaders”

Social Order and Political “Leaders”

Thomas Hodgskin was a great classical liberal leader. His book has this quote about Social Order and the motivations of other polical “leaders” he knew in Parliament.

His insights anticipated the Public Choice School of economists, who teach us to look to the behavioral motives of elected officials and their bureaucratic employees. His book: The Natural and Artificial Right of Property Contrasted (1832) was very important in the 1830s’ British debates about the proper role of government. He strongly opposed Jeremy Bentham’s and James Mill’s Utiliarianism, and he directly influenced Herbert Spencer.

See George H. Smith’s series on this great classical liberal.
Hodgkin’s independent spirit, his intense dislike of unjust authority, and his determination “to make a powerful resistance to oppression every time [he] was its victim” was forged during a brief career in the Royal Navy. One is reminded of Herman Melville’s story of “Billy Budd.”

Let’s take this complex quotation and break it into four segments of argument.

  1. What is “social order”? How does it arise peacefully?
  2. Social order occurs prior to the State and legislators.
  3. Legislation attempts to freeze out natural changes.
  4. The political meddling by politicians introduces social dis-order.

1. What is “social order”?

“Social order is the mutual dependence of all those who contribute to the subsistence and welfare of society. It includes the manner in which they assist and protect each other, and provide for the mutual wants by the interchange of their respective products. . . .”

Hodskin defines “social order” as a process F.A. Hayek would later describe as “spontaneous order.” It arises from the evolution of usage and successful experimentation just as all social customs evolve, as well as our common language.

2. It is prior to government

“If by social order be meant the great scheme of social production, mutual dependence, and mutual service, which grows out of the division of labour, that scheme I will boldly assert the legislator frequently contravenes, but never promotes – that grows from the laws of man’s being, and precedes all the plans of the legislator, to regulate or preserve it. . . .”

The bureaucrats and Parliamentarians who make regulations and laws are restrictive and seek “to regulate or preserve” the status quo for the benefit of vested, crony interests.

3. Political meddling is costly

“In fact his attempts to keep in one state what is continually in progress are mischievous. . . .”

The bureaucrat and the legislator cause more direct and indirect harm to the peaceful operation of social order than they intend. We can measure this in the rent-seeking costs of lobbyists and protectionists, and the expense of compliance with regulations.

4. The motivations of the lawgivers

“We must then set aside as mere pretexts the assertions of the legislator, that he intends to preserve social order, and promote the public welfare; and we must deal with legislation as solely intended to preserve the power and privileges of the legislator.”

The meddling of the political “leader” is for the purpose of keeping himself and his peers in power. Whether this is a conscious “conspiracy” of political parties, or an indirect effect of making incentives for rent-seekers to work for protectionism, the results are the same for average people: lower standards of living.

The model of “the legislator” in Thomas Hodgskin’s writing is Jeremy Bentham and his protege James Mill, who saw in mechanistic Utilitarianism the key to setting up a “designed,” positive-law utopian scheme for government. This Utilitarianism almost destroyed the classical liberal arguments for human rights and civil liberties in the early decades of the 19th century.

Thomas Hodgskin and Herbert Spencer preserved the original, central argument for private property rights developed by John Locke on the premise of a peaceful “social order,” contrasted with the ideas of Thomas Hobbes (human lives are “nasty, brutish and short” due to warfare of “all against all” in nature). This discussion should now turn to John Locke’s innovation in his 1st and 2nd Treatise on Government.