Hoppe on Milton Friedman and the Drift Toward Statism

From Natural Elites, Intellectuals, and the State:

This seemingly unstoppable drift toward statism is illustrated by the fate of the so-called Chicago School: Milton Friedman, his predecessors, and his followers. In the 1930s and 1940s, the Chicago School was still considered left-fringe, and justly so, considering that Friedman, for instance, advocated a central bank and paper money instead of a gold standard. He wholeheartedly endorsed the principle of the welfare state with his proposal of a guaranteed minimum income (negative income tax) on which he could not set a limit. He advocated a progressive income tax to achieve his explicitly egalitarian goals (and he personally helped implement the withholding tax). Friedman endorsed the idea that the State could impose taxes to fund the production of all goods that had a positive neighborhood effect or which he thought would have such an effect. This implies, of course, that there is almost nothing that the state can not tax-fund!

In addition, Friedman and his followers were proponents of the shallowest of all shallow philosophies: ethical and epistemological relativism. There is no such thing as ultimate moral truths and all of our factual, empirical knowledge is at best only hypothetically true. Yet they never doubted that there must be a state, and that the state must be democratic.

Today, half a century later, the Chicago-Friedman school, without having essentially changed any of its positions, is regarded as right-wing and free-market. Indeed, the school defines the borderline of respectable opinion on the political Right, which only extremists cross. Such is the magnitude of the change in public opinion that public employees have brought about.

The Very Best H.L Mencken Quotes

Mencken was one of the most important social critics and columnists in American history. His prose and ability to craft remarkable sentences are now of legend.  He was well known for covering the Scopes trial (it is popularly known as the “monkey trial” –this was Mencken’s doing). Here is Murray Rothbard’s essay on Mencken: “H.L. Mencken: The Joyous Libertarian.”

Here are my favorite quotes of Mencken’s:

  • “A professional politician is a professionally dishonorable man. In order to get anywhere near high office he has to make so many compromises and submit to so many humiliations that he becomes indistinguishable from a streetwalker.”urgetosavemencken1
  • “Democracy is an art of governing the circus from the monkey’s cage.”
  • “The men the American people admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth.”
  • “The most dangerous man, to any government, is the man who is able to think things out for himself… Almost inevitably, he comes to the conclusion that the government he lives under is dishonest, insane, and intolerable.”
  • “The urge to save humanity is almost always a false front for the urge to rule.”
  • “I believe that it is better to be free than to be not free, even when the former is dangerous and the latter safe. I believe that the finest qualities of man can flourish only in free air– that progress made under the shadow of the policeman’s club is also progress, and of no permanent value. I believe that any man who takes the liberty of another into his keeping is bound to become a tyrant, and that any man who yields up his liberty, in however slight measure, is bound to become a slave.”
  • “The truth, indeed, is something that mankind, for some mysterious reason, instinctively dislikes. Every man who tries to tell it is unpopular, and even when, by the sheer strength of his case, he prevails, he is put down as a scoundrel.”
  • “When a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental — men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand. So confronted, the candidate must either bark with the pack or be lost… All the odds are on the man who is, intrinsically, the most devious and mediocre….”
  • “As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.”
  • “The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed a standard citizenry, to put down dissent and originality.”mencken-dressed-up1024x675
  • “The typical lawmaker of today is a man wholly devoid of principle — a mere counter in a grotesque and knavish game. If the right pressure could be applied to him, he would be cheerfully in favor of polygamy, astrology or cannibalism.”
  • “It is [a politician’s] business to get and hold his job at all costs. If he can hold it by lying, he will hold it by lying; if lying peters out, he will try to hold it by embracing new truths. His ear is ever close to the ground.”
  • “Public opinion, in its raw state, gushes out in the immemorial form of the mob’s fear. It is piped into central factories, and there it is flavoured and coloured and put into cans.”
  • “I believe that all government is evil, and that trying to improve it is largely a waste of time.”
  • “The state… consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can’t get, and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time it is made good by looting ‘A’ to satisfy ‘B’. In other words, [the state] is a broker in pillage, and every election is a sort of advanced auction on stolen goods.”
  • “Democracy is a pathetic belief in the collective wisdom of individual ignorance.”
  • “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins.”
  • “The notion that a radical is one who hates his country is naive and usually idiotic. He is, more likely, one who likes his country more than the rest of us, and is thus more disturbed than the rest of us when he sees it debauched. He is not a bad citizen turning to crime; he is a good citizen driven to despair.”
FINALLY! The History of Economic Thought, part 2

FINALLY! The History of Economic Thought, part 2

So much of my understanding of economics has come directly from digging into the details of its development over time. It’s amazing what a better grasp of something one can receive by learning the roots of the theory, the context from which is sprung, and the debates our intellectual forefathers had with their opponents. Studying the history of political and economic thought is just as rewarding as studying more modern and systematic works on the subjects themselves.

Gerard Casey is the master of the history of political thought, and his recent book on the matter was based on his series of lectures from Tom Woods’ Liberty Classroom.

I was ecstatic to discover yesterday that Bob Murphy’s overview of the history of economic thought was just released this week. The first part of this series has been out for a while and I have profited tremendously from it. The second part I have yet to go through, but from the list of topics, it looks amazing. If you decide that you need this– and in all honesty, you do– it would be awesome if you entered the site to purchase at my link: austrolibertarian.com/woods 

And what better time to do it?? Besides Murphy’s new course, they are also having a sale right now so you can get access at a discounted price. Excellent!

Check out the lecture list for parts 1 and 2.

 

Property theory proves its usefulness in another field: Computer programming

Property exists, according to Hans-Hermann Hoppe, to avoid conflicts over scarce resources. Property allows human beings to avoid constantly fighting each other over the same plot of land, the same cow, or the same hammer. Someone is the owner, and there’s a protocol for the legitimate transfer of title from one person to the next. A simple rule almost everyone can comprehend orders our behavior to prevent most conflicts before they start. I don’t take Sue’s hammer because it’s hers.

In computer programming, scarce resources are also a potential source of conflict. A program is constantly appropriating portions of memory (called allocation), doing work with the data it stores there, and then telling the system it’s done using that portion (called deallocation). If those steps aren’t taken carefully, different programs, or even parts of the same program, will try to use the same location in memory, creating a lot of problems.

Normally, either the programmer is responsible for anticipating these conflicts and addressing them explicitly, or there is an extra process running alongside the program, called a garbage collector, that performs the “deallocation” job so the programmer doesn’t have to remember to do it. The latter is convenient, but it comes at the price of a slower program.

In the human world these approaches would be akin to either memorizing a script that tells me what to do in all situations, or having a third person monitor me while I act on impulse, constantly updating Sue about the status of her hammer. Property works great for humans because a simple, universal rule takes a lot less energy than trying to monitor or anticipate every possible problem.

The relatively new Rust programming language manages to capitalize on this ancient human innovation. In a sense, it thinks of memory as property. It enforces a policy the creators call ownership. Details are available here. To make a long story short, only one part of your program at a time is allowed to read and write to a particular piece of memory. Title to that data is passed around to the other parts of your program as needed, but your code will not be allowed to run in the first place if one part is instructed to use data without owning it first. To the astonishment of some in the computing world, this prevents a lot of common mistakes without imposing a cost on speed. To an Austrian, it is no surprise that this approach solves a number of hard problems.

The Rulers in a Propertarian Society

The Rulers in a Propertarian Society

If a ruler is one who has the legal claim to setting the “rules” of a given jurisdiction, then logically the property owner is a ruler over all that he owns.  And further, if the ideal libertarian society can be described as a “Propertarian” society, that is, a society made up only of privately-owned property as opposed to “public” property, then it is essentially ruled by proper owners creating their rules and voluntary interacting with each other.  The number of rulers in this society is not zero, in fact, it is hundreds or thousands or however big the society is! Ironically then, it is democracy and every other State structure which limits the number of rulers.

The point here is that there most certainly are rules in a capitalistic and strict property-rights order.  The anarcho-capitalists should always remember this. It’s just that there is no state-originated rules. Thats the difference.

Recently, I read a similar statement by Mises Canada’s Editor in Chief James E. Miller, who wrote:

The issue is not necessarily the functionality of a hypothetical anarcho-capitalist society, but of definition. The etymology of anarchy is simple: the ancient Greek meaning is simply “without rulers.” Are so-called “rulers” necessary for capitalism? Yes and no, depending on one’s general understanding.

Private property itself needs rulers – that is the owners of the property themselves. The same goes for hierarchy. If a rentier owns land that people agree to live on, there is a clear distinction between who’s in charge.

Glad to see this agreement.

H.L. Mencken on Envy and Democracy

H.L. Mencken on Envy and Democracy

Mencken:

No doubt my distaste for democracy as a political theory is, like every other human prejudice, due to an inner lack-to a defect that is a good deal less in the theory than in myself. In this case it is very probably my incapacity for envy.

That emotion, or weakness, or whatever you choose to call it, is quite absent from my make-up; where it ought to be there is a vacuum. In the face of another man’s good fortune I am as inert as a curb broker before Johann Sebastian Bach. It gives me neither pleasure or distress. The fact, for example, that John D. Rockefeller had more money than I have is as uninteresting to me as the fact that he believed in total immersion and wore detachable cuffs. And the fact that some half-anonymous ass or other has been elected President of the United States, or appointed a professor at Harvard, or married to a rich wife, or even to a beautiful and amiable one: this fact is as meaningless to me as the latest piece of bogus news from eastern Europe.

The reason for this does not lie in any native nobility or acquired virtue. Far from it, indeed. It lies in the accidental circumstance that the business I pursue in the world seldom brings me into very active competition with other men. I have, of course, rivals but they do not rival me directly and exactly, as one delicatessen dealer or or clergyman or lawyer or politician rivals another.

It is only rarely that their success costs me anything, and even then the fact is usually concealed. I have always had enough money to meet my modest needs and have always found it easy to get more than I actually want. A skeptic as to all ideas, including especially my own, I have never suffered a pang when the ideas of some other imbecile prevailed. […]

And there is only one sound argument for democracy, and that is the argument that it is a crime for any man to hold himself out as better than other men, and, above all, a most heinous offense for him to prove it.

What I admire most in any man is a serene spirit, a steady freedom from moral indignation, an all-embracing tolerance-in short, what is commonly called good sportsmanship. Such a man is not to be mistaken for one who shirks the hard knocks of life. On the contrary, he is frequently an eager gladiator, vastly enjoying opposition. But when he fights, he fights in the manner of a gentleman fighting a duel, not in that of a longshoreman cleaning out a waterfront saloon. That is to say, he carefully guards his amour propre by assuming that his opponent is as decent a man he is, and just as honest-and perhaps, after all, right. Such an attitude is palpably impossible to a democrat. His distinguishing mark is the fact that he always attacks his opponents, not only with all arms, but also with snorts and objurgations-that he is always filled with moral indignation-that he is incapable of imaging honor in an antagonist, and hence incapable of honor himself.

Such fellows I do not like. I do not share their emotion. I cannot understand their indignation, their choler. In particular, I can’t fathom their envy.

And so I am against them.

Taken from A Blind Spot from the Smart Set, 1920, pp.43-44

Hans-Hermann Hoppe on the Long-Term Capital Effects of Taxation

Hans-Hermann Hoppe on the Long-Term Capital Effects of Taxation

From The Economics and Ethics of Private Property

Taxation is a coercive, non-contractual transfer of definite physical assets (nowadays mostly, but not exclusively money), and the value embodied in them, from a person or group of persons who first held these assets and who could have derived an income from further holding them, to another, who now possesses them and now derives an income from so doing. How did these assets come into the hands of their original owners? Ruling out that this was the outcome of another previous act of taxation, and noting that only those assets can be taxed that have not yet been consumed or whose value has not yet been exhausted through acts of consumption (a tax-gatherer does not take away another man’s garbage but rather his still valuable assets!), three and only three possibilities exist: They come into one’s possession either by one’s having perceived certain nature-given goods as scarce and having actively brought them into one’s possession before anyone else had seen and done so; by having produced them by means of one’s labor out of such previously appropriated goods; or through voluntary, contractual acquisition from a previous appropriator or producer. Only through these types of activities is one capable of acquiring and increasing valuable—and hence taxable—assets. Acts of original appropriation turn something which no one had previously perceived as a possible source of income into an income-providing asset; acts of production are by their very nature aimed at the transformation of a less valuable asset into a more valuable one; and every contractual exchange concerns the change and redirection of specific assets from the hands of those who value their possession less to those who value them more.

From this it follows that any form of taxation implies a reduction of income a person can expect to receive from original appropriation, from production, or from contracting. Since these activities require the employment of scarce means—at least time and the use of one’s body—which could be used for consumption and/or leisure, the opportunity cost of performing them is raised. The marginal utility of appropriating, producing, and contracting is decreased, and the marginal utility of consumption and leisure increased. Accordingly, there will be a tendency to shift out of the former roles and into the latter ones.

Thus, by coercively transferring valuable, not yet consumed assets from their producers (in the wider sense of the term including appropriators and contractors) to people who have not produced them, taxation reduces producers’ present income and their presently possible level of consumption. Moreover, it reduces the present incentive for future production of valuable assets and thereby also lowers future income and the future level of available consumption. Taxation is not just a punishment of consumption without any effect on productive efforts; it is also an assault on production as the only means of providing for and possibly increasing future income and consumption expenditure. By lowering the present value associated with future-directed, value-productive efforts, taxation raises the effective rate of time preference, i.e., the rate of originary interest and, accordingly, leads to a shortening of the period of production and provision and so exerts an inexorable influence of pushing mankind into the direction of an existence of living from hand to mouth. Just increase taxation enough, and you will have mankind reduced to the level of barbaric animal beasts.

Hans-Hermann Hoppe. The Economics and Ethics of Private Property (Kindle Locations 438-463). Ludwig von Mises Institute. Kindle Edition.

The mask is coming off on “tax reform”

It seems to me the current tax reform brouhaha plays right into the Bastiat or Rothbard analysis of the state: It’s a machine of legal plunder, and various interest groups compete to aim the mugger’s gun at their enemies to reward their friends. You can see this in how strenuously and uncharacteristically Democrats object to a tax increase when it happens to shift more of the burden onto certain wealthy constituencies they associate with.

Quote from Guido Hulsmann’s Mises Biography

Guido Hulsmann’s massive biography of Ludwig von Mises, entitled “Mises: The Last Knight of Liberalism” is a real gem. Liberalism in the title, of course, refers to the Old Liberalism, or classical liberalism, (pre-American Progressivist/socialist “liberalism.”) which taught the freedom of the individual against statism and political power– and more importantly at a historical level, developed the economic case for free trade and the market system.

The following was pulled from the very beginning of the Preface.  I enjoyed it because it succinctly captures the difficult political context in which Mises developed his socio-economic thought.  The end of the quote makes mention of Mises’ audacious stance on epistemology, which was quite unacceptable during his time with the rise of logical positivism.  And today too, embracing logic to the extent Mises had done is considered “old fashioned” and un-“scientific.”41v+FKNfYyL._SX322_BO1,204,203,200_

In the summer of 1940, with Hitler’s troops moving through France to encircle Switzerland, Ludwig von Mises sat beside his wife Margit on a bus filled with Jews fleeing Europe. To avoid capture, the bus driver took back roads through the French country- side, stopping to ask locals if the Germans had been spotted ahead—reversing and finding alternative routes if they had been.

Mises was two months shy of his fifty-ninth birthday. He was on the invaders’ list of wanted men. Two years earlier, they had ransacked his Vienna apartment, confiscating his records, and freezing his assets. Mises then hoped to be safe in Geneva. Now nowhere in Europe seemed safe. Not only was he a prominent intellectual of Jewish descent; he was widely known to be an arch- enemy of National Socialism and of every other form of socialism. Some called him “the last knight of liberalism.”

He had personally steered Austria away from Bolshevism, saved his country from the level of hyperinflation that destroyed inter- war Germany, and convinced a generation of young socialist intellectuals to embrace the market. Now he was a political refugee headed for a foreign continent.

The couple arrived in the United States with barely any money and no prospects for income. Mises’s former students and disciples had found prestigious positions in British and American universities (often with his help), but Mises himself was considered an anachronism. In an age of growing government and central planning, he was a defender of private property and an opponent of all government intervention in the economy. Perhaps worst of all, he was a proponent of verbal logic and realism in the beginning heyday of positivism and mathematical modeling.

Looking For Blog Contributors

Looking For Blog Contributors

My vision for the AustroLibertarian website is to have the primary site be dedicated to longer articles, published 3-5 per week which has at its content longer contributions and reflections on a range of political, economic, and sociological issues.

I also have ideas for some media efforts, which will come soon.

For now, I am looking for contributors for the AustroLibertarian blog, which is a distinct feed from the AustroLibertarian main site. I want this one to be a little less edited and more raw. I envision very short pieces, quick thoughts, quotes, graphics, things like that. Like Facebook posts. Ideally, I’d have 2-3 posts on here per day, which means I may need 5-7 contributors, plus myself.

If you are very familiar with Austrian economics, libertarianism, and so on, feel free to send me an email: cjay [at] cjayengel [dot] com. I prefer people who have done their fair share of writing, who really are well read in the Misesian, Rothbardian, Hoppean literature, and have the time to make at least 1-2 blogposts per week.

There’s No Difference Between a Kind Capitalism and a Greedy Capitalism

There’s No Difference Between a Kind Capitalism and a Greedy Capitalism

I’m responding specifically to sentiments I’ve seen expressed in the conservative world as of recent. I’ve noticed there’s been a large injection lately of attempts to piously criticize a sort of “greedy” or “profit-oriented” capitalism. All of this is nonsense on stilts, built on the foundation of what Mises called the “Anti-capitalist mentality.” It is cautious toward pure and unfettered capitalism because it does not understand capitalism.

Capitalism is a social arrangement in which the means of production are privately owned; where the employment of said means is done according to the will of the consumers, as communicated via the price mechanism. Whether this employment of scarce capital is due to the capitalist being “kind” (and therefore doing as the consumer wants) or “greedy” (and therefore, in order greedily acquire a profit, doing as the consumer wants), it makes no difference. Perhaps we would want a man to be kind, and not greedy, but this has nothing to do with the existence of capitalism.

Man has an incalculable number of motivations for acting as he does, and no man, by praxeological definition, acts contrary to his own interests. In this sense, man is entirely self-interested. Indeed, we were created to be this way. But self-interest expresses itself in a capitalist system by enabling man to gain what he desires only if he first contributes to the gain of his fellow man. This is what economists have referred to as a “coincidence of wants.” A kind man does not automatically provide for his fellow man better than the greedy man.

Whether this is “greed” or not is too difficult to judge. In any case, the benefits of Capitalism don’t care whether a man is greedy or kind. Or whether a man is lustful or compassionate. Capitalism is the arrangement wherein each man acts according to his own mental state and results in a growth in prosperity and a betterment of the masses. As Mises writes:

Capitalism is essentially a system of mass production for the satisfaction of the needs of the masses. It pours a horn of plenty upon the common man. It has raised the average standard of living to a height never dreamed of in earlier ages. It has made accessible to millions of people enjoyments which a few gen- erations ago were only within the reach of a small élite.

Economic interventionism against greed, regulation which aims to “protect” consumers,  regresses this glorious trend and not only puts back on the path to serfdom, but it also hampers the opportunity that the masses and the impoverished would have had to participate in the rising standards of living. It is a roadblock, a detriment, to the common man.

Only Individuals Can Be Victims

Crimes are those actions which have as their victims actual individual human beings. There is no abstract “crime against society” as the Progressives want you to think; nor is there a “crime against the state” as fascists want you to think. Rather, a crime is something which actually aggresses the person or property of another individual specific.

In this way, actual justice has to do with crimes and there is no such thing as “social justice,” much to the disdain of the socialists, left-libertarians, progressive Christians, and so on. Any crime which, say, aggresses hundreds of people is a “crime against many individuals,” not a “social crime.” Society has no rights, for society is not a thing in itself. We must speak in terms of the individual, lest collectivism creep in unannounced.

With this understanding, we also eradicate the guilt-manipulative thinking of modern Progressives who seek to make certain classes of people feel bad for the treatment of other classes of people, decades or even centuries in the past. Individuals today, of course, are not responsible for the treatment of victims in the past. The state is attracted to deviations from the true nature of criminality and justice because, besides its own systematic deviation from the nature of justice, it also understands that it can leverage for its own power the class conflict created by distortions in justice theory.

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