Definition of collective: a grouping of individuals.
Definition of collectivism: having to do with a collective.
1. Voluntary collectivism is fine. E.g. being part of a baseball team, joining a hippie-commune, etc.
2. The initiation of coercive collectivism is not OK. E.g. being bound by physical force (or threat thereof) to:
a) join a street-gang; b) fund a government national defense force; etc.
3. Coercive collectivism is OK if used in self-defense. E.g. a group of individuals use physical force to subdue a violent thug.
Remember, precision with terms is very important.
A lot of pro-liberty people think that fractional-reserve banking is a nefarious thing that should be made illegal.
Why do they think this? Because:
- 1. They believe that it is inherently fraudulent.
- 2. It increases the money supply and thus decreases the value of the money (assuming of course that the demand for money has not increased to match the increased supply).
I will address both of these points:
- 1. It is not true that it is inherently fraudulent. This example proves it:
-I go the bank to make a deposit and specifically request that they keep only a fraction of it on reserve.
-I also stipulate that I want to be able to withdraw a sum equivalent to what I put in at any time.
So, as long as both parties consent to it being done, how can it be considered fraud?
- 2. They are correct here that it does decrease the value of the money (with the assumption I noted above).
However, they are not justified in using physical force (ie. making it illegal) to stop me from decreasing the value of the money via my engaging in a fractional-reserve deposit. Why?
Because you don't have a natural right to the value of your property. You only have a right to the property itself. For example, say my house declined in price from $200,000 to $150,000. I do not have a right to apply coercion on my neighbor to make him buy it at its previous price of $200,000.
Thus, both of their objections do not give sufficient justification to make it illegal. Long live fractional-reserve banking!