The People Don't Know Their True Power

The Institutionalization of Violence and Fraud

Man, in the course of his life, may be subject to several kinds of violence and fraud. He may be robbed, assaulted, threatened. His home may be ransacked, burgled, and vandalized. His life’s savings may be swindled away from him. Worse, man may find his very life put at risk by those people who have respect for neither the property, nor the life of others.

(Though it should be remarked a curiosity that criminals do not disrespect the institution of property itself. Criminals always seem to have a respect for their own property, and their own lives. They will try to defend their property, even if it has been acquired through theft. In this manner, a criminal respects property – but not equally his own and that of others.)

All of these acts of violence and fraud, though serious and harmful, are nonetheless individual in nature. A group of criminals may temporarily band together into a gang to commit crimes more easily. But such groupings are uncommon, and by their nature as criminals, short-lived.

However, there is a second kind of violence and fraud, fault for the creation of which lies squarely at the feet of government; that entity which has usurped and arrogated to itself the power to create laws and punish offenders.

I will at every point provide ample examples and explanations. It is for you to judge, and make an honest decision about whether the world has become more violent, fraudulent and corrupt with, or without government.


To illustrate the wide extent of this problem, I provide the following examples:


Throughout history, numerous banks have committed fraud by misappropriating customer funds reserved for safekeeping, and then lending them out. When confined to an individual bank, this practice known as fractional reserve banking, will in the long-run hurt only the bank committing the crime and its customers.

However, when banks grow influential enough with the legal monopoly we know as government, they allow such fraud on a widespread and legal level. Moreover, these banking interests also create a central bank, the purpose of which is to bail out the commercial banks at the end of an expansionary credit cycle, using yet more misappropriated funds, this time from taxpayers.

At this point, any bank that does not engage in the fraud of fractional reserve banking will find itself outspent by those that do; for those that do now possess a greater amount of funds for their credit operations, while the consequences of their actions have been greatly reduced due to the creation of a lender of last resort.


While a skilled criminal can counterfeit any money in existence, his operations are liable to be relatively small, and to harm others in a restricted manner. Moreover, the product of his crime is likely to be spotted with a keen eye, or with adequate technology.

However, when those in government create a currency, force it onto its subjects using legal tender laws, and then proceed to devalue this currency through perpetual counterfeit – they institutionalize the crime of counterfeit. Worse yet, since the entity creating the counterfeit currency is the same one that decides what currency is supposed to be, and can use force to compel people to its use – the new counterfeits are indistinguishable from the old.

Now all money in circulation, and all money saved for the future, becomes devalued at the whim of a criminal. Prices throughout the economy begin to consistently rise, year over year, and capital is forever misallocated in cycles called the boom and the bust. The crime of counterfeit, or widespread theft from millions of people, becomes complete and total in its pervasiveness.

At this point, when you see governments cracking down on other counterfeit operations, take note that they do this for the same reason an organized crime syndicate cracks down on another’s protection racket – they don’t like the competition.

Unfortunately, this is not the end of this story. When institutionalizing counterfeit, government creates two crimes. For while the crime of counterfeit is the only obvious one, the previous crime of fractional reserve banking, or the fraudulent misappropriation of funds, becomes endemic.

This occurs because when sharing a common currency, a bank that engages in fractional reserve banking no longer harms just its own prospects and that of its customers – it now harms everyone using the common currency, through the creation of fiduciary media, or credit, which has the same economic effect as creation of new monetary units by counterfeit.


A scheme that collects funds from one group (promising to return them in the future), and pays those funds out to another group, in such a way that the beneficiaries of the funds form a growing burden upon an ever diminishing number of providers who will never be fully compensated, if compensated at all – is known as a Ponzi scheme.

As long as ponzi schemes rely on fraud to entice unwitting fools into their system, it harms only a select and fairly small number of people. However, when such a scheme is imposed onto unwilling people by force, it becomes both widespread and institutionalized.

Such an institutionalization of fraud is nothing less than a wide-scale, inter-generational redistribution of stolen funds. This crime is impossible to even conceive of without the use of an apparatus of compulsion like that of the State.


Here there are two types of violence – systematic government violence of a direct nature, and institutionalized violence whose existence is predicated on a certain kind of law.


The primary reason for which armed gangs of criminals are short-lived is because they have no particularly sustainable or profitable income generating businesses. Here’s where the government can help.

By prohibiting the manufacture, import, and sale of a certain good or service, the government makes it so that only those who are willing to become outlaws will engage in such an activity. By raising such a potent barrier to entry, both the risk and the profit associated with the business of a particular commodity rises many fold.

Thus, the government has created “cash cows” for organized crime syndicates to prosper. The most obvious examples are the prohibition on drugs, gambling, weapons, and prostitution. In the 1920’s, the United States Government also attempted to prohibit alcohol, the result of which was the meteoric rise to prominence of “The Mafia”.

Without such black market activities to fund itself, no serious organized crime syndicate is sustainable.

More than the enlargement of criminal operations, prohibitions also engender the corruption of police forces, an increase in the consumption of the prohibited item, and a decrease in its quality.


The protection racket is a time-tested source of income for crime syndicates. The concept is simple – pay us, or we’ll break your kneecaps. It is called the protection racket, because the extracted income, the protection money, is paid for protection from the person to whom the money is paid.

A protection racket is not a mutually consensual exchange of services for money. It is theft backed up by the threat of violence. The primary difference between a one-time robbery and a protection racket, is that the latter persists for many years, and payments must come on a regular basis. Or else.

Protection rackets usually do not manifest themselves absent a very well-organized crime syndicate, usually one whose primary source of revenue is a combination of goods traded on the black market. A market made black by the government.

However, when protection rackets are employed by governments themselves, they institutionalize a very harmful and violent practice by increasing it to “government proportions”.

Though a government will frequently inundate its protection racket with red tape and bureaucratic nonsense in the hope of obscuring its true nature, the fact remains that taxation in no way differs from a protection racket.

Pay us taxes, or bad things will happen. What bad things? Theft of property (euphemistically called confiscations and fines). Followed by kidnapping and imprisonment (euphemistically called jail time for tax evasion). Followed by murder (euphemistically called use of lethal force when resisting arrest). I call this the pyramid of violence.

This is an example of systemic violence performed by government directly. Since no governments exist which rule by consent of all the governed, a large portion of the population require constant intimidation and threat of force to compel them to fund a government’s protection racket – particularly when they disagree with the manner in which their funds are disposed of.

I also feel it necessary to remark that insofar as a person pays taxes he does not want, to avoid repercussions of government violence against his person, he is not free, but a slave. Whether the chains are visible and hanging from his limbs, or in his mind, makes little difference.


A quarrel between neighbors writ large, war is indisputably the domain of governments.

For a government to declare war against another, the following three requirements must be satisfied.

Number one: the government must have already declared war, and won, against its own people. For only a submissive and brainwashed population of subjects can be compelled to pay taxes – especially to fund a war of aggression. Since taxation is slavery, a government must first enslave its own people, before it can attempt to enslave another.

Number two: the government must be capable of mustering sufficient manpower to fight its war. This almost always requires conscription. Since conscription is the forcible taking of another human being’s time, and possibly their life, it is a form of slavery. Thus, a government must twice enslave its people to wage a war.

Number three: There must be the prospect of taking over another government’s taxation base, or some other kind of gain. There is little point in conquering a free people not already enslaved, for their enslavement is likely to be more costly than any economic benefit derived.

I have now provided you with three examples of institutionalized fraud, and three of violence. Together, they constitute the greatest cause of social unrest and systematic theft known to man. And all of them, without exception, have been made such only by their codification into a system of violence and compulsion.

This is not a question of candidates, of politics, or of party. This is a question of system. Government force, by its very nature, takes the worst in people and makes it law.

I have not even touched upon the wholesale slaughter and internment of people into concentration camps. A practice that has killed countless millions, and which for all I can tell is not even achievable without the use of government force. That example, and many others, are not an amplification of existing crimes, but the creation of new ones.

Nor have I yet mentioned how in the same breath as government violence is used all over the world, governments also forbid or restrict the use of self-defense. You think that’s an accident?

You will not solve this problem by voting.

But changing the way you think, and the withdrawal of your consent, would sure go a long way to making the world a more peaceful place.

The People Don't Know Their True Power

4 thoughts on “The Institutionalization of Violence and Fraud”

  1. Pingback: A Society of Plunder

  2. Nice way to lay out the “control methods of the ruling class.” I look forward to reading more of your work, perhaps I’ll find a piece you did specifically on voting.

  3. Great article but i guess you left out the icing on d cake. The ruling class or the government itself. Is Government as an institution in itself not an institutionalized crime in itself? A institionalized organisation of violence in itself? Those Vikings and Chengiz Khans and alexanders institionalized in what we today know as Government.

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