ADAM DAVIDSON, HOST:
So, Robert, as far as I can tell, today's podcast is at least in part an effort on your behalf to take a lovely little mini-vacation to northern New Hampshire and have an excuse to expense it to PLANET MONEY and NPR.
ROBERT SMITH, HOST:
No, Adam, I went up to the beautiful white mountains of northern New Hampshire close to the Canadian border for pure reportorial reasons. It is the site of the Porcupine Freedom Festival. And the people there call themselves porcupines because they're cute, they're cuddly, and you don't want to mess with them. And at first glance, the Freedom Festival looks like just about any other festival. There's tents. There's young people. There's lines for the bathroom. But you know how if you're into art or alternative culture you go to Burning Man?
DAVIDSON: Every year. Absolutely.
SMITH: But if you love music, you go to Bonnaroo?
DAVIDSON: Sure, all the time. I have no idea what that is.
SMITH: Well, if you think the Federal Reserve is illegal, that we should return our money to the gold standard, if you believe we should abolish the IRS, then you go to the Porcupine festival - to PorcFest, as they call it.
DAVIDSON: All right. And we should say we're talking, obviously, about Libertarians. These are, like, big L Libertarians. And we've talked a lot about the libertarian philosophy here on PLANET MONEY. I think it's important to remember there are lots of different ways of being a Libertarian. Some are true anarcho-capitalists who think there should be absolutely no government.
But most Libertarians I've talked to believe there is a role for government, but a very small, limited one, largely to protect property rights, to set the conditions so that citizens can make arrangements amongst themselves. There doesn't need to be so much regulation. There shouldn't be so much taxation. Libertarians generally think it's none of the government's business whether or not I do drugs, who I marry, what food I eat.
SMITH: And we've covered these theories before on PLANET MONEY. But we wondered - how do you make it work in real life? I mean, how do you buy things in a libertarian society? How do you eat breakfast with no government role? And it turns out it's actually more complicated than you might think.
(SOUNDBITE OF MARTIN ANDREW SMITH AND ROGER JON ELLORY'S "CHEYENNE SHUFFLE")
SMITH: Today on the show - freedom. We go to a place where we do as the Founding Fathers intended. We buy food uninspected by any government agency using gold and silver mined from the earth. And we meet a 9-year-old who sold us alcohol.
(SOUNDBITE OF MARTIN ANDREW SMITH AND ROGER JON ELLORY'S "CHEYENNE SHUFFLE")
SMITH: Just a quick note. This story was originally reported in 2011, and we'll have an update at the end.
(SOUNDBITE OF ARCHIVED BROADCAST)
SMITH: So I arrived at this festival in the middle of the night. And the next morning, around 8:30, I came out to the campground and I smelled freedom, which actually smells a lot like bacon.
GEORGE MANDRIK: Oh, yeah, we're just cooking this up. How you doing today?
SMITH: How much bacon do you have?
MANDRIK: I've purchased 150 pounds of bacon. And I actually weaved 90 of it. And by weaved I mean I made a 10-piece bacon weave. It's got 10 pieces of bacon. I weave it into, like, a little blanket.
SMITH: It's about the size of a CD case. That's George Mandrik. And he set up a tent right in the middle of the campground where he sells bacon weaves and bacon weave omelets with cheese. Yeah, I know. You have to picture this place, Adam. You would love it, and not just for the bacon. Everyone has their little tents where they sleep or their RVs. But out front, most people have set up some sort of stand or table where they sell food, they sell books, they sell precious metals - gold, silver, copper.
This is what they do in the forest. Rather than, you know, just make s'mores around the campfire, they participate in a market. They buy and sell things. And you can't just buy or sell anything. You have to sort of brag that you are doing it without the government. So George tells me proudly that he has no permit for his bacon, that his grill has never been inspected, that he will not pay taxes to the government.
MANDRIK: They want their cut, basically. And they want to take - they want to take part of my profit away from me, you know, the fruits of my labor. And hey, you know, they don't have any business. And they don't - I don't want them in my business at all. So I just say, hey, you know, if somebody wants to buy my food, that's between me and them. And it's none of their business what I'm doing.
ED CAMOE: We don't need to regulate George because we'll regulate him. If he poisons me, I won't buy his food and he'll be done. So...
SMITH: You'll run him out of the campground.
SMITH: That was Ed Camoe (ph), who was waiting in line for a bacon weave. And when he says he will take you out of the campground he means it. He's got a gun in a holster on his belt. It's an XD(M) Springfield. Well, he told me that. And you get the impression that no matter how tough a New Hampshire food inspector is, he is not as tough as Ed is.
DAVIDSON: But when you think about it, it is really hard to get the government out of your breakfast or out of your life in any way. I mean, George *********
DAVIDSON: **** I mean, George might be, in this immediate instance, avoiding permits and taxes, but, you know, he got eggs. Presumably, the USDA is inspecting those eggs. The USDA inspects the bacon.
SMITH: Yeah. And George is a little sheepish about this. He says that oftentimes, he can get unregulated eggs. But, you know, he's serving so many breakfasts, he had to buy them in a store. And so the eggs and the bacon are actually approved by the government at some point.
And you could tell that people give him a hard time - give all these Libertarians a hard time about driving on the federal highways or buying things in a store. And George has a little speech that he says over and over again. He says, look, I am not a hermit. I do not live in the forest and avoid all forms of commerce.
He's just trying to minimize the role of the federal government. So for instance, to pay for the bacon-weave omelet, George will take dollars, U.S. dollars, but he prefers gold and silver.
MANDRIK: One of the most common is what they call junk silver, which is pre-1964 dimes or quarters and also certain years of half dollars, all kinds of things like that. We also take, you know, bullion. I've already had a - somebody pay me in a gram of gold. And we just pretty much started a tab. We counted it as $50, and we just owe them that money for the food, so they would come by. We had a little list we kept track of.
SMITH: So in your cash register, is there...
SMITH: ...Gold? Is there silver?
MANDRIK: Yeah, come on, check it out. Here, we'll come over here. Here. Sorry.
SMITH: One gram of silver, 5 grams of silver...
MANDRIK: 10.1 grams of gold.
SMITH: Wow, that's gold?
SMITH: Whoa, it's like a strand of gold.
SMITH: How much is this worth?
MANDRIK: Jay (ph), what are these, 10 bucks? Nine dollars?
SMITH: You know, what? I heard this all day long. Now, how much is the silver? Now, what's the rate on gold? I mean, remember, it is 8:30 in the morning. There are campers lined up for breakfast. They have not had their coffee yet. And people are trying to do math in their heads about the price of gold and silver.
DAVIDSON: But gold and silver in the last few years - there have been periods of intense volatility.
SMITH: Yeah, yeah.
DAVIDSON: And they, like - they got their iPhones out, and they're checking the gold and silver price date moment by moment?
SMITH: Yes, they are. I asked them this, and they do it on their phones. They do it on internet connections. There are little boards that are posted all over the campground with the current prices of gold and silver. And, you know, the weird thing is although they hate, to a person, the Federal Reserve and the Federal Reserve note, which is what they call the U.S. dollar, the Federal Reserve note, they do have to keep translating gold and silver prices into dollars. People are constantly talking about, how much for this, and how much for that? And they speak in dollars.
But, you know, I want the most government-free omelet I can get. So...
DAVIDSON: And all you have are Federal Reserve notes at that moment?
SMITH: Unfortunately, that's what I get paid in. So I have to leave the breakfast line to go get some silver. Now luckily, at this time of the morning, there is a mini-bank and a mint, an actual mint, set up on a folding table down the hill.
RON HELWIG: I'm Ron Helwig. I am the - I don't know if you would call it inventor, designer, whatever - of the Shire Silver model.
SMITH: Well, you're sort of the Federal Reserve chairman. You're the Ben Bernanke of silver here in the campground.
HELWIG: Well, without the violence.
SMITH: The violence?
SMITH: Oh, he just seems like such a calm man.
HELWIG: Yeah, he seems like it. But, you know, he's like the mafia don who can, you know, talk reasonable, but you know if you go up against him, odds are you're going to get hurt.
DAVIDSON: You called a super free-market libertarian Ben Bernanke?
SMITH: Yeah, I know.
SMITH: I know.
DAVIDSON: Even I know that's a really dumb thing to do. That is - I think that's literally the most insulting...
DAVIDSON: ...Thing you could...
DAVIDSON: ...Say. You could have called him Stalin...
DAVIDSON: ...Or even President Obama, and it wouldn't have been quite as offensive to him.
SMITH: Turns out, they do not think that the Federal Reserve is a subject for joking. I screwed up. So I learned that you have to avoid the whole subject of the Fed. And I don't even ask him to elaborate on the whole violence thing because I need silver. I need coffee. I need to buy my breakfast.
So the thing about Ron is that he has invented a very neat little version of silver that I want to buy from him. And you know how everyone mocks the people who say that we should use gold and silver? They say, oh, what are you going to do, carry around a bunch of your coins in your pocket with your pants sagging down with all that gold?
DAVIDSON: Yeah, I mean, we got that little gold piece that was, you know, like, the size of a dime. And that was 400 and something dollars. So if we wanted, like, a penny or a nickel, what would we do? We'd just shave off a microscopic speck? I don't know how you use precious metals in day-to-day transactions.
SMITH: Well, actually, that is what Ron does. He basically shaves off small strips of metal. He buys them from a jewelry supplier, and then he laminates them. He takes the little tiny strips of metal and he has an office laminator, and he makes something about the size of a credit card. And I have one right here. It is a little card. It says Shire Silver. It's laminated. And on the back, what do you see there?
DAVIDSON: Oh, wow, yeah. There's, like, a little tiny, tiny, tiny metal bar, very, very thin. Shire Silver, defending traditional value.
SMITH: I paid a buck-90 for that.
DAVIDSON: Wow, a buck-90 for this? All right. I - actually, you know, this would work, right? It's almost more convenient than a dollar bill. It's like...
SMITH: Well, that's the great thing about it is that it makes it so you can carry silver in your wallet. So I bought a bunch of these.
DAVIDSON: All right, but let me just say (laughter) - I'm assuming you know about as much about silver as I do, which means I have no idea how much this thin little bar is worth.
SMITH: It's shiny.
DAVIDSON: It is shiny (laughter). I don't know if it's - and also, it's packed inside of this card, which seems much heavier than the little bar of silver, so I can't really weigh it to figure out how much it is. So you're just in the woods in New Hampshire, and you hand a guy a whole lot of money, and he hands you a bunch of cards and claims that they're worth what they're worth?
SMITH: Yup. And he says oh, you can go to a jeweler. But once again, we are in the woods in (laughter) New Hampshire. And so he says, you know, basically, look, you have to trust me on this. And this is the weird thing about being up at this campground. I mean, there's some tough guys here. They're carrying guns. They don't trust the government, but they keep saying, you've got to trust me. We've got to trust each other.
You know, and I realized that one of the services that government offers us is the luxury of not trusting one another. I mean, that's why you have inspectors. That's why you have police. Because you assume that somebody's out to get you - somebody's out to poison your food or steal your stuff. But when you're in the campground, you kind of have to take people at their word.
So I take my 10 grams of silver, and I head back to the omelet stand because, once again, I am desperate for coffee. And even there, I'm trusting George, who is making my bacon-weave omelet, that he washed his hands somewhere at some point in the campground.
DAVIDSON: And I think this is exactly the point libertarians would say is all those government inspectors, all of those symbols of trust in our society - they're false. They're fake - that you can't trust the restaurant. And so why not call it what it is and force yourself to only trust people who deserve your trust rather than just believing in a government that's probably letting you down?
SMITH: Or in my case, not thinking about it because I'm so hungry.
So I'll have a cup of coffee and a bacon-weave omelet. What's it going to cost in silver?
MANDRIK: That would be five of those. So they're 2 bucks apiece.
SMITH: OK, two...
MANDRIK: Roughly equal to about two bucks apiece.
SMITH: OK, OK, I have a five gram - have a five gram silver card here.
MANDRIK: That's valued at $10 right now.
SMITH: Excellent, good deal. Thanks.
UNIDENTIFIED MAN: Thank you.
SMITH: I don't know if you noticed, but I actually got a great deal on that omelet. They valued silver at a higher price than I bought it at. Ten minutes later, I made a profit - kind of.
DAVIDSON: Well, it sounds like anytime you can have a bacon-weave omelet, you've made a profit. But it seems to me that if you don't have just a regular currency that everyone agrees on, it's an awful lot of work.
SMITH: Well, I mean, that's kind of the point of the Porcupine Festival. Like, everything's a lot of work. You know, you have to, like, track down who is selling what. And you have to figure out what they're taking. Some of them take silver in grams, some of them in ounces. And so people are constantly trying to translate those in their head. Some people take gold. Some guy sold me copper who said that it's the next big thing. Yeah, it's not the next big thing.
But they're doing all of this to make a point. They say they want to be ready if the Federal Reserve dollar, or they should say when the Federal Reserve dollar goes under, when it's not - when paper money isn't worth anything anymore, they're going to know what the next currency is. It's going to be something like this little silver strip.
DAVIDSON: Isn't that - I thought it's illegal to print your own currency. Are they allowed to actually do this?
SMITH: Well, there are many laws about this. It's illegal to mint coins that resemble U.S. currency. I mean, that's just counterfeiting. But it's also illegal - so I understand it - to set up systems that compete with official currency. Now, what does that mean? You know, there was one alternative currency called the Liberty Dollar that some people felt was a little too competitive with the dollar that they were using as a currency, and that got a bunch of people arrested.
DAVIDSON: So are there, like, Secret Service around ready to pounce on your silver card manufacturer?
SMITH: Well, I mean, you know, if you press people, they will make it clear - they say, listen, you're not buying something with silver. You are trading something of value, silver, for something else of value, bacon-weave omelet for instance. And if you have a silver coin, they don't call it a silver coin. It's called a silver round because a coin would be illegal. Only the government can make a coin. But a silver round is just an object of value that you can trade.
But listen, this is all just semantics because, to tell you the truth, the people here like breaking the law. A lot of them like breaking the law. They are proud of smashing what they consider stupid laws. So you can buy bootleg cigarettes, $4 a pack, without all the government taxes. And they will proudly say, I did not pay taxes on these cigarettes. There's illegal bars without liquor licenses, and they sell moonshine. There's marijuana trade. But listen, when it comes to illegal moments, my favorite - my favorite is this little hardened criminal.
DOROTHY: I'm Dorothy (ph), and I'm 9 years old.
SMITH: Dorothy. She was in the family tent, and they had just had a lesson for kids about economics and market realities. Basically, it was like a little camp for little tiny libertarians. And the camp counselor was encouraging kids to sell whatever they can think of to the unsuspecting adults walking by. And so Dorothy had this little stack of woven - they looked like little potholders. She called them coasters.
DAVIDSON: Were they woven out of bacon?
SMITH: No, they are woven out of a fabric. But they were sitting there in front of me, and they were beautiful. And I have kids, so I bought one with silver. She was very pleased to get silver.
So I would like the yellow coaster/potholder. I like it. It's simpler. And here you go. Here's one gram of silver.
DOROTHY: Thank you.
SMITH: You're welcome. Thank you.
DOROTHY: Oh, yeah. And with every potholder, you get a free bottle of beer.
SMITH: I get a free bottle of beer?
SMITH: You are both a bartender and a craftsman?
DOROTHY: Pretty much.
SMITH: What kind of beer do you have?
DOROTHY: See for yourself. Well, I actually don't know.
DAVIDSON: You bought beer from a 9-year-old girl?
SMITH: It was delicious.
DAVIDSON: You are a criminal. Like, you contributed to the corruption of a minor.
SMITH: Yeah, that's probably right. And listen, I know it looks bad. If you went to, you know, let's say a state legislature and you said, you know, I'd like to legalize children selling alcohol in little stands in front of their home, I mean, politicians would freak out. It would never happen. But I got to tell you something, this transaction seemed so innocent. It was like buying a cup of lemonade from a lemonade stand. Dorothy wasn't sneaking any of the beer, and her mom was right next to her the whole time.
UNIDENTIFIED WOMAN: It's fine with us. And if an adult comes by and wants to have the beer, that's their choice. If a parent comes by and sees the beer and they don't want to participate in that, that's their choice as well.
SMITH: But you have standards. Like, if a 6-year-old comes and wants the beer...
UNIDENTIFIED WOMAN: I would not give beer to a 6-year-old. No, I would not.
SMITH: See, they have standards. And it brings it back to that whole trust thing. Every bootleg alcohol stand that I went to told me that they would not serve minors. But the key is, it's not because the government told them to but out of respect for the parents. They didn't want parents coming to them and say, why did you serve my 16-year-old beer?
DAVIDSON: And I got to say, this is an area where I have a lot of sympathy for them because we do have a lot of insane regulations in America. It is true - there are a lot of nutty regulations. And liquor, beer, wine - this is an area where many of our regulations are nonsensical. I mean, there's states where you can only buy booze from state offices. The state shouldn't be selling alcohol. In the U.S, you can buy wine in wine stores, but you can't buy them in supermarkets. And no company can own several wine stores at once, which creates inefficiencies in the marketplace.
And, you know, I think a lot of economists see this not as helping protect our young children or anything. It's just protecting the interest of large wine distributors or large spirits companies. And so I have sympathy for them, although, of course, I don't go out to the woods of New Hampshire. I just buy wine at the wine store and just deal with it.
SMITH: But it does sound like you would fit in there. And (laughter) I got to say, you know, this is why so many people that I talked to out at the campground, they talked so proudly about breaking the law. They walked me through each and every gory detail of how they broke the law. They gave me their full names. They're basically daring law enforcement to drag them away.
And there's a reason for this, which is they believe that if they disobey laws which they feel are stupid, they're going to be just like a guy named Mike Fisher, the rogue manicurist.
SMITH: I know. This guy is a legend here among these porcupines in New Hampshire. In 2005, Mike Fisher had heard about all the regulations it takes to become a manicurist in New Hampshire just to do nails. And so he took action. In the campground, I met a guy named Dave Minson, (ph) who was a friend of Mike Fisher's, and he told the story.
DAVE MINSON: There was a group of us. And kind of as a civil protest, he called the the Board of Manicurists or whatever their governing board is. He told them he was going to perform an illegal act out in the kind of the yard in front of their building. So...
SMITH: So this was outside the headquarters of the Manicurists Association or whatever...
MINSON: Exactly. So what he did is he trimmed another gal that was with us' nails.
SMITH: So what'd he have, just a little nail clipper and a file? Or...
MINSON: Yeah, she was sitting on a chair, and then he was kneeling in front of her, you know. And he just trimmed up her nails. And then they called in the authorities, and they arrested him.
SMITH: They actually took him away in a police car?
MINSON: Oh, yeah. Yeah, yeah.
SMITH: So Mike Fisher pleaded guilty. He took the case to court. He wanted to have his moment to talk about manicurists laws, and he did. This became a huge press story. Around the nation, people covered this crazy, rogue manicurist. And in the end - in fact, in the last session of the state legislature in New Hampshire, there were a number of bills introduced to not only deregulate manicurists but here's the list of things that they want to abolish licensing for - barbers, tanning facilities, landscape architects, court reporters, family mediators, guides, athletic trainers, massage therapists, peddlers and itinerant vendors, much like George.
DAVIDSON: Wow, and I will say there is a big literature among economists in the U.S. about how often licensing laws, just like liquor laws, don't serve the general interest. They just serve a certain group of people, allowing them to charge much more for their services because it limits the number of people supplying them. And it ends up hurting the general public, which is supposedly the people who are supposed to be protected by these licensing laws.
So is that their dream - that they'll sort of one by one have these little civil disobedient moments and destroy the regulatory and monetary apparatus of the U.S. government, and eventually we'll all be effectively living in the woods of New Hampshire?
SMITH: Well, I'm sure that's the dream for some of them. Remember, some think that these little laws are silly, and they want to get rid of those. But a lot of the people I talked to want to get rid of all taxes. They want to get rid of the school system. They believe people should home-school. It should be private schools. They want to get rid of most government services - absolutely health care, Social Security - all these things should be gone in their point of view.
DAVIDSON: I know many libertarians want to get rid of the Army, right? They think we should not intervene in foreign wars. We should only have a small defensive force to protect our borders.
SMITH: So you know, it's cute to say that, you know, the manicure laws are silly. But these people have a serious goal. A lot of them have a serious goal to fundamentally change the United States of America. And if the campground, the Porcupine Festival, is any judge, it is going to be a difficult road because even the simplest things there are not quite working the way they should.
Now, remember that silver I bought to buy my bacon weave? (Laughter) Well, I had extra silver. And so come dinnertime, I heard about this Thai food restaurant. I guess, it was a tent - Thai food tent across the campground. So I traveled to the other side of the campground, and I order a Thai burrito. And I whip out my little silver cards, the Shire Silver cards. And the guy looks at them, and he just shakes his head. He says his coin guy back home won't take them. He's like, well, do you have any of the silver rounds or those old dimes, the ones that, you know, before 1965, whatever, when they were made of silver. And as I'm standing there, the guy behind me in line says, well, you know, I'll give you a $1.10 for each of those little strips of silver.
DAVIDSON: But you paid $1.90. That's...
SMITH: I paid $1.90. All of a sudden, I feel like a total sucker. Now I'm the one asking, where's the trust, guys? Where's the trust?
DAVIDSON: But you learned a valuable lesson.
SMITH: Yeah, I learned that the market always has the last word.
(SOUNDBITE OF MARTIN ANDREW SMITH AND ROGER JON ELLORY'S "CHEYENNE SHUFFLE")
SMITH: We'll have an update on the Porcupine Freedom Festival of 2017 right after this.
(SOUNDBITE OF MARTIN ANDREW SMITH AND ROGER JON ELLORY'S "CHEYENNE SHUFFLE")
SMITH: To see how things are going at PorcFest these days, 2017, I called up Matt Philips. He's the president of the Free State Project. They run PorcFest. When I reached him, he was wandering around the festival. I can picture it in my mind. Cell service - still not perfect up there.
MATT PHILIPS: I am down on the main field where I (inaudible) and a bunch of picnic tables. And I'm actually just standing right near the bonfire.
SMITH: But Matt says they have made some improvements in PorcFest. They now have Wi-Fi, which they definitely didn't have when I was there. And he says that's cleared the way for this other big change.
PHILIPS: Six years ago, you would have seen a lot of people trading gold and silver. This year, a lot of them - most of them are taking bitcoin and other cryptocurrencies. If I look just up the hill there, I can see a food truck that is Little Zoe's Pizza. They've got really good pizza. I actually just had one. And right next to the menu, they have a little QR code that you can scan with your phone and then send them bitcoin in order to pay for your pizza.
SMITH: And not only are people using bitcoin now to buy food, the food at the festival has a slightly different flavor.
PHILIPS: So there's still a bit of bacon, but there's definitely, you know, places that are doing smoothies, and there's a vegan spot.
SMITH: Sounds like you're getting a little soft at PorcFest.
PHILIPS: (Laughter) Well, you know, part of the thing that we're doing here is having this little mini-experiment into, you know, the free market. And then people decide what they want to buy and, you know, decide for themselves what they're - what's good for them.
SMITH: So it's nice to hear that the libertarians at PorcFest are being a little more healthy. But is there still at least my favorite PorcFest food, the food that I will forever associate with freedom, the bacon-weave omelet?
PHILIPS: I haven't seen the gentleman who was doing that. I haven't seen him this year. But if he comes back, I'm sure he will sell a lot of those.
(SOUNDBITE OF PODINGTON BEAR'S "NOW SON")
SMITH: Have you been to a fabulous, fun outdoor festival or state fair or some other gathering that teaches a fundamental principle of economics? We would love to hear about it. It's summer vacation season. Email us - firstname.lastname@example.org. Or you can find us on Facebook or Twitter.
And now that you're finished listening to PLANET MONEY, may I recommend NPR's new podcast called Up First? It is a daily preview of the day's news. And the most important thing about this podcast is it goes every morning, Monday through Friday, at 6 in the morning, which means you can hit your shower and, in 12 minutes, get everything you need, preparing for the day, while you're still soaking up and rinsing. That's called Up First, and you can find it wherever you get your podcasts. I'm Robert Smith. Thanks for listening.
(SOUNDBITE OF PODINGTON BEAR'S "NOW SON")
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