Six Reasons Why Centralization Is Bad

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The other day a friend contacted me, looking for an article that explained why centralization is bad. At first I was sure there had to be many, but I came up dry. Hence today’s article.

The odd thing about centralization is that people expect its bad aspects to be external things, like economic issues. But those aren’t the most important things. If the internal effects of centralization were recognized, and if we did something about them, the outer problems would vanish with them.

But since everyone expects economic reasons, I’ll start there:

#1: Centralization disrupts price discovery.

Disrupting price discovery… that sounds very “economic.” What it means is this: Whenever headquarters decides to meddle in business transactions, large sections of the marketplace are thrown out of order. The biggest offenders in this area were the 20th century’s socialist states. I’m not sure precisely how many people died (mainly of starvation) from their economic “experiments,” but the number is in the range of 100 million.

Prices are not just numbers, you see; they are crucial information. How many separate prices, for example, go into the delivery of a pencil to your local store((And if you haven’t, you should read I, Pencil, by Leonard Reed. It’s short and illuminating.))? Wood, graphite, lacquer, the pigment for the lacquer, the machines that mix and apply the lacquer, the machines that cut the trees into small pieces of wood, the trucks that move the materials, the cost of hiring the drivers, the cost of the tires, and so on, at great length.

Once the political boss says, “Pencils should cost X,” all those costs are pushed and shoved accordingly. Changes have to be made, corners are cut, or scrambles for the extra few cents begin. The process is disrupted, and you can be sure that the quality of pencils will decline, fewer will appear, and/or the various suppliers will fight like crazy.

In the end, this delivers big problems, like the aforementioned starvation. A hundred million deaths, in just the 20th century, came from this. (And it wasn’t the bosses who starved; it was the poor and powerless. You know, the people whom the bosses “love and serve.”) So, disrupting price discovery is really, really bad.

#2: Centralization robs you.

Centralization creates a group of people who eat (and generally grow rich) at the expense of everyone else. Every dollar that goes to politicians – for their very fine offices and cars and travel budgets and everything else – is money that is stolen from you and your neighbors.

#3: Central bosses try to show they’re necessary.

Did you ever notice that politicians are forever creating new fears? And why? Well, because solving those fears (even if they’re mostly imaginary, as most are) makes them seem necessary.

From this we get any number of disasters, especially wars. Have you noticed that presidents become far more popular when they wage a war? Fear sells, and war is a tremendous spectacle. And it makes the centralizers look necessary. (Too bad about all those dead guys.)

#4: Centralization limits you.

Centralized power solving our fears requires an ever-increasing number of laws, and each law is a restriction of some kind. Pretty soon, you can’t do half the things you could a couple of decades before. There’s a law for every problem and a department to solve it. Address it yourself and you’re likely to get hurt.

So, to keep us safe from our professionally cultivated fears, your kid can’t run a lemonade stand without a license, your older aunt can’t watch the neighbor kids, and God help you if you try to give a lost child a ride home.

Centralization is a straightjacket… restraining not just our bodies, but also our souls.

#5: Centralization kills cooperation.

There are rules for everything. So, you can no longer cooperate with your neighbor because you enjoy it. No… you cooperate because it’s commanded by law and you’ll be punished if you don’t.

Have you noticed people yearning for the old days and talking about small, rustic communities where the people “still look out for each other”? Well, they’re right to yearn for that, because it’s a very healthy way to live. And it’s centralization that stole it from us.

#6: Centralization robs you of self-worth.

Following on from #5 above: What happens inside you when you help people because you, by yourself, give a damn? I think we all know the answer: You become a better, happier, and more beneficial person. You know you did a good thing. And then you feel good about yourself.

Every time you do “the right thing” because it’s mandated by law, you are being robbed of self-worth and self-improvement. And your friends and neighbors are robbed of your improved state.

Have We Had Enough?

Perhaps you’ve thought of items that could be added to this list, but these six are at least a good start.

The conclusion is this:

Centralization is anti-human. It’s the enemy of human goodness and progress.

What supports centralization is a steady stream of fears, most of which are imaginary.

So, have we had enough? Can we ditch this garbage now? Can we please start growing up?

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www.freemansperspective.com

Centralization vs. Decentralization

While the 20th century unequivocally belonged to the centralization of resources and capital, both human and monetary, we are now undergoing a shift of seismic proportions in the 21st century. And understanding this is so utterly crucial to your personal wealth. The issue of decentralization is one of the most important discussions of our time.

centralization

While the 20th century unequivocally belonged to the centralization of resources and capital, both human and monetary, we are now undergoing a shift of seismic proportions in the 21st century. And understanding this is so utterly crucial to your personal wealth.

The issue of decentralization is one of the most important discussions of our time. It is being thrust upon individuals, corporates and governments alike as waves of capital shift at increasing speed.

And as a side effect, this is also creating an ever increasing gap between those who fail to understand how, why and from where this new inexplicably threat comes from to the few who understand and are taking advantage of it usurping old systems and in the process creating wealth.

In some instances this is life changing wealth. Just consider the most valuable companies in the world today and what makes them valuable.

(It’s not in fixed assets such as infrastructure, mines, railroads or the like.)

Shockingly, decentralization is an issue which gets less attention than a nipple slip from one of the Kardashians or some such celebrity who, as far as I can tell, is famous for being famous. This is how the world has always worked, proving Pareto’s law with the repetition of a Swiss clock. Incidentally this allows for the few who understand the forces in motion to prepare, and prosper well ahead of the masses.

Make no mistake: decentralization is changing the playing field as I pen this to you.

Think about it for a moment… everything from politics down to personal lifestyle choices is affected. And while possibly not immediately obvious to the casual observer, even the recent Apple versus FBI fight is an issue of centralization vs. decentralization.

So, with all that in mind, I recently caught up with our friend Paul Rosenberg.

Paul is not only the founder of Cryptohippie but he is an adventure capitalist and a man who knows a heck of a lot about a lot of things. That is actually an understatement since his experience run the gamut from philosophy, theology, history, psychology, and even physics. He has also written several books and has just published his new book The Breaking Dawn, which has been compared to Atlas Shrugged for a new generation.

Paul was one of the speakers at our Seraph event two years ago in Aspen where he left us all with a presentation which I know sparked at least one “a-ha moment” from each person present in the room.

As you can imagine we’re therefore very excited that Paul will be joining us once again at our upcoming Seraph Global Summit in June.

The world belongs to those who take action and Paul is a remarkable example of this. I encourage you to grab one of the remaining spaces as Seraph events are very bespoke with attendance strictly limited.

We do this in order to ensure that quite frankly we’re not at some massive conference with hundreds of attendees who’s names we will never remember and who will be lucky to get 5 minutes with our guest speakers and ourselves. We’re hosting this in the US which is somewhat unusual for us so if you’re in country then now is the time to come participate in what I suspect will be one of the highlights of your year.

To get an insight into the richness of Paul’s ideas and depth of his viewpoints, I invite you to tune in to the recording of the aforementioned conversation I had with Paul a few weeks ago. I think you’ll find it insightful.

Pretty powerful, right?

I think we can agree there’s a seismic global trend underway here. As mentioned the 20th century was about centralization, but the 21st century will be all about decentralization. As investors, there are some very compelling ways to ride that wave.

I’ll be touching upon centralization vs. decentralization in my writings over the next few weeks, and it is a core theme we’ll be covering extensively at the Seraph Global Summit.

I’m curious to hear where you stand on this. And, more importantly, have you considered how this will affect your life and your investment portfolio?

– Chris

“How can you govern a country which has 246 varieties of cheese?” – Charles de Gaulle

 

This article was originally published by Capitalist Exploits.