This afterword first appeared in the 1987 Avon paperback edition. — JNS, November, 1996

Samuel Edward Konkin III is the Father of Agorism, the economic philosophy that inspired the Revolutionary Agorist Cadre in Alongside Night. As editor of the longest-lasting “purist” libertarian magazine, New Libertarian, and executive director of the new countereconomic think tank, The Agorist Institute, Konkin is attempting in real life what Merce Rampart has accomplished, so far, only in my imagination. — JNS

Two thousand dollars for a taxi ride across Manhattan? Underground shopping centers where the stores accept payment only in gold? The Almighty Dollar so worthless that even the United States Army won’t take it anymore?

Surely this sort of paranoid fantasy went out with the seventies?

Certainly, in the eighties of Reaganomics, low inflation, and tax “reform,” we don’t have to worry about this economic scenario anymore.

Or do we?

To answer that question, we need a quick look at economic history.

In 1910, an economist named Ludwig von Mises had his doctoral thesis published in his native Austro-Hungarian Empire. It eventually appeared in English under the title The Theory of Money and Credit.

On the face of it, this does not sound like the most important event of the twentieth century, but it may very well be to the science of economics what the publication of Einstein’s General Theory of Relativity was to the science of physics.

Mises set forth principles that explained the Roaring Twenties and — two decades before Black Thursday — the inevitability of the following economic collapse that would lead to the Great Depression. Mises also provided the only set of economic principles that could explain the “stagflation” of the late 1970s. Other economic theories stated that this mixture of inflation and recession could not exist and floundered when it did.

Mises was no Nostradamus. Financial analysts and believing entrepreneurs followed his “Austrian” theory in the teeth of Friedman and Keynes concerning that “barbarous yellow metal” as gold was to be legalized. They saw the price per ounce skyrocket to $800, settle down to $300, and begin a steady upward climb. His prophecy proved to be a valid scientific prediction and . . . on the money. When a set of general principles is found, over the long term, to be able to make valid predictions in a certain field of knowledge, that field has qualified as a science.

In a nutshell, Mises’s theory ran that if government inflated the money supply, it would generate a boom. Since supply follows demand, investments are made to provide luxury goods and services for the boom time. But the inflationary money is only “temporarily real.” Price levels go up everywhere, people find they can’t buy as much as they thought they could? cut back on their consumption, and the demand drops, usually below previous levels, because of squandered real goods. Luxury goods sit on store shelves, which causes businesses to cut back. Capital is wasted, workers are in the wrong jobs. Luxury goods are sold off below cost in going-out-of-business sales, and workers are laid off.

This period of poor business and high unemployment is called a depression.

Injecting money into the economy is like injecting heroin into the body. A “high” results, but it’s temporary, and a bigger dose is needed for the next “high.” Eventually, this leads to overdose. If the government doesn’t go cold turkey and leave the money supply alone, the people come to expect a total inflationary wipeout, dumping their money as fast as they get it (or faster). Nobody wants it. Everyone knows it’s not real. Inflation has gone runaway, and this is known as hyperinflation or crack-up boom.

What an economy looks like in the last stages of the overdose is portrayed in Alongside Night.

Historically, this has happened repeatedly: in the American Revolutionary War, in the French Revolution, in the U.S. Civil War, in Germany in 1923, in China in 1949, in Brazil in 1964, and so on. Currency collapses either started revolutions or pushed them over the top. That’s as far as Mises’s economic predictions went.

In the late 1960s, Mises’s economics spread through the radical movements. Radical libertarians, having outright rejected or abandoned Marx as demonstrably false, not only latched onto Mises but took notice of an effect that conservative “Austrians” feared and spoke of only in hushed tones: the economic theory predicted, more or less accidentally, the collapse of an economy and hence political revolution.

But what a place for a radical to start. The government, by its own stupidity, was going to bring about a revolution. In the early 1970s, it certainly looked like it. The radical libertarians stood on the shoulders of the giant Ludwig von Mises. And in 1972, a young student radical named J. Neil Schulman clambered up there with the rest of us.

In 1973, the United States of America, through the Federal Reserve Board, appeared to have lost control of inflation. The libertarian Right was turning to survivalism and heading for the hills–these are the “brownies” of Alongside Night. We of the libertarian Left looked forward to the insurrection following economic collapse as a rare opportunity. The socialists had smoked pipe dreams of American proletariat arising for a century; now they were down to ashes. The libertarian free-market Left saw Mises’s infallible indicators predicting the stripping of everyone, including the middle class, of their wealth: wiping out their bank accounts, annihilating small businesses and workers’ wages. Now this is what would finally bring comfortable, complacent Americans into the streets. But when?

In 1973, Ludwig von Mises died. Austrians, neo-Austrians, Left and Right Austrians outbid each other with predictions of the righteous monetary thunderbolt of the market at last bringing justice to the statists (and profits galore for those who went “long” on gold and silver). No one but Mises was sufficiently respected to judge, and he was gone. The cautious Austrians claimed that predicting the timing of real-world events was one of those things Man Was Not Meant To Know. But the rest of us remembered Mises’s success and plunged ahead.

Judging from events such as Nixon’s imposition of wage and price controls (a truly fascist concept), I foresaw a wave of repression as early as 1975 as inflation went runaway.

Neil was relatively cautious and decided to play it safe, setting his portrayal of the economic collapse of America at least several decades away.

Alongside Night is terribly accurate. Whenever the American crack-up boom happens, few libertarians would disagree with his outline of the scenarios. But Neil went one step farther than most of the libertarians of the time. He integrated the new science of countereconomics and the economic philosophy of Agorism, which I had only begun to develop in 1974.

Agorism is the view that, regardless of whether or not it is sanctioned by the state, free trade conducted morally is still moral. Crack dealers, midwives, porn pushers, truckers using CB to outrace Smokey, coyotes, and tax evaders are to be regarded as truly free-market businesspersons and moralists; law- and regulation-abiding types are seen as wimps; and tax-subsidized, loan-guaranteed corporate heads are seen as a bunch of fascists.

Agorism is the only philosophy that explains why, in an East German alley, a hooker and a bible smuggler ducking into the same doorway to avoid the police not only won’t turn each other in but are also both acting right and proper.

Sure, if it ever happens, Alongside Night is right. In other words, it is “hard” science fiction by virtue of its use of a theoretical science to predict real-world events. But how likely is it, when we live in (what appear to be) noninflationary times?

In 1975, the legalization of gold acted as a safety valve on the economy. And with the Vietnam War over, the government’s pressure for spending money it didn’t have (additional taxation through inflation) was gone, at least temporarily. The government of the United States of America took some of its medicine and we headed into a depression instead of hyperinflation.

In the early Reagan years, the inflation continued — but completely anticipated. It even became lower than anticipated because of bankruptcies, liquidation sales, and unemployment. Unions are still collapsing as an aftershock but, brag the Reaganites, at least we brought down inflation.

The mechanics of what happened are still fairly complex and controversial even among Austrian economists, but it is clear that the Reagan administration “bit the bullet” by lowering the rate of inflation and accepting the depression. The money supply was fine-tuned so that the fall in prices resulting from the depression was matched by the continued increase in the money supply: that is, canceling out most of the price increase usually resulting from inflation.

But the quick fix has run its course. The American dollar edges downward in world currency markets and drags along foreign banks and currencies that accept American inflation as an export — so far. Gold continues relentlessly upward in price long term. And still the federal budgets and their deficits, now past two trillion, grow higher and higher.

The fundamental principles of Austrian economics remain in place. And what they predict is still valid. Either the United States will give up monetization of its debt and live humbly with what it can extract from taxation alone, or the scenario of Alongside Night will come to pass.

When the next clamor for massive government spending arises, whether for a Greater Society or Star Wars defenses, the money will have to roll from the presses, the consumers will be caught, the inflation will be anticipated ever higher, and the hyperinflation scenario will be in place again. But with one difference: the last inflation spree left a permanent part of the economy underground, not just pimps and pushers but straight businessmen and their workers who left the “aboveground” economy for the countereconomy. When the feds inflate, they confiscate from a smaller base, and as they inflate, they push more and more entrepreneurs Agorist-ward — and have less and less tax base and fewer and fewer victims.

With fewer people accepting the same amount of money, it buys less. That is, it inflates — even without the government doing it The people going countereconomic take the decision out of the hands of the state and force a crack-up. But this time it’s only the statists themselves upon whom the consequences are visited. And that is the scenario of that profoundly moral novel of justice finally served, Alongside Night.

When? You decide, dear reader; but you are now well armed to see the signs and know what actions to take. Thanks to Ludwig von Mises, a small band of rational revolutionary students, and J. Neil Schulman, artist.