Capitalists and the Lowest Price

In Jacobin’s series “The ABCs of Capitalism,” which I was browsing this morning after just receiving them in the mail, I came across this statement:

If a capitalist doesn’t produce at the lowest price, she knows that she will lose customers, if that continues, her firm will start bleeding money.

This is almost striking in its ignorance of the real world. The series purports to explain as simply as possible “how the system works” so that socialism can therefore be seen as the alternative. But in the real world, in the system as it exists, consumers weigh hundreds of factors in their patronage of businesses. Price is definitely one of them. But if the lowest price was the only standard, we wouldn’t have Whole Foods, Apple, Nordstrom, mansions, Bulletproof coffee, Hardback books, First Class flying, Mercedes, etc.

People buy things, not because they are the lowest cost, but because various other factors have added into the equation including quality, customers service, durability, name recognition, social status, price, style, accessibility, unique features, and on and on.

The capitalist profits to the extent that he arranges resources in a way that satisfies consumers, not merely in the potential price differential between costs and whatever the sales price is. This shows a shocking lack of understanding of how prices are formed across time and backward through the stages of production.


Does AOC want Power?

At Target Liberty, Robert Wenzel writes:

The more I see of her, the more I am convinced she is a skilled Leninist. She wants power, that is what drives her. She is not seeking truth in any fashion. She is using policy issues and alliances in a very skilled manner to advance the only cause she is really interested in: Power to AOC and the greater the power the better, That agenda doesn’t sit too well with a live and let live philosophy.

I disagree. I think that’s a little sloppy. I think she’s just some kid from New York who knows nothing about how the real world works, about what economic theory teaches about the nature of capitalism and exchange, and zero interest in understanding property rights and the liberties that depend on them. She’s simply a loon perfectly suited for massive following in the social media age. She’s goofy, she knows how to play victim to her advantage (every time someone offered legitimate criticism, she dismisses it as “because I’m female), and therefore can’t argue intellectually.

But of course, her know-nothingness is not the primary problem. Most congresspeople know nothing. It’s that the ideas she thinks are great, are, in fact, devastating. And the system she thinks she loathes– capitalism– is not in actuality the problem of our age; state interventionism is.


Jacobin Skewers Mises

Remember how I’m really reading a lot of Jacobin right now as I work to create this magazine? The jerks just barfed up this gem, Happy New Year:

So it’s less surprising than it might initially appear that Ludwig von Mises has joined Nietzsche and Heidegger in the pantheon of today’s alt-right. Richard Spencer has recommended that his acolytes read von Mises and his American student Murray Rothbard. Mencius Moldbug, the preferred brand of pseudo-highbrow neofascist leaders, agrees: “Mises is a titan; Rothbard is a giant,” he has written. The chairman of the Ludwig von Mises Institute (LVMI) in Auburn, Alabama, is Lew Rockwell, whom you might remember for ghostwriting all those racist Ron Paul newsletters. The LVMI’s most notorious affiliate is Hans-Hermann Hoppe, whose 2001 screed Democracy: The God That Failed has become something of a bible for the alt-right movement.

The Moldbug thing is the most hysterical, both in the colloquial and literal sense. It’s the low brow smear of century: someone recommended someone else, therefore the one being recommended is associated with the recommender.

I suppose the Richard Spencer thing could be categorized as such as well, but there’s nuance here: Spencer used to be a better libertarian, but is self-admittedly no longer.

At any rate, the idea that the alt-right, which has no actual definition and is just a mindless accusation against anyone to the “right” of Mitt Romney, finds the classical liberalism of Mises as their crowning inspiration immensely lacks credibility.


Reconciliation is Between Individuals

Earlier this year, I wrote:

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 one’s neighbor.

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 socialist or liberal Christian. Any crime which 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.

Let’s push this further. There have in recent years been efforts to pursue “racial reconciliation.” But reconciliation, since it relies on individuals agreeing to restore friendly relationships with others, can only take place on an individual basis. Agitating for racial reconciliation makes one guilty of holding animosity against others on the simple basis that one belongs to a specific race. This is absurd. Only individuals think. Only individuals act. Only individuals are guilty or innocent. Only individuals are moral agents.

Rather than “racial reconciliation,” we need to realize that reconciliation, like crime, takes place between individuals. Only individuals can be said to be in need of reconciliation. And therefore, by good and necessary consequence, there are also individuals who are not in need of reconciliation on racial issues. By refusing to adopt a collectivist paradigm, we free many individuals from the guilt manipulation rampant in our world of cultural leftism. And we therefore yank the carpet upon which the social authoritarians stand.


Mises Against Polylogism

Polylogism is back with a vengeance. We see it everywhere:

“men can’t have an opinion on abortion because they can’t carry children!”

“whites can’t have an opinion on racial struggles because they are not minorities!”

This is an adoption of the theory that one’s social or biological class must be emphasized above the human mind. That is, that logic and reason is not something that belongs in the same way to all people, but instead is differentiated based on the class to which one belongs. Of course, the quickest reply to such claims is that if they are true, then by the same token the accuser cannot have an opinion about what, say, men and whites cannot have an opinion on because they are not men or white. In other words, the response should be that it creates an immediate contradiction.

On this troubling doctrine, Mises wrote:

Marxian polylogism asserts that the logical structure of the mind is different with the members of various social classes. Racial polylogism differs from Marxian polylogism only in so far as it ascribes to each race a peculiar logical structure of mind and maintains that all members of a definite race, no matter what their class affiliation may be, are endowed with this peculiar logical structure.

There is no need to enter here into a critique of the concepts social class and race as applied by these doctrines. It is not necessary to ask the Marxians when and how a proletarian who succeeds in joining the ranks of the bourgeoisie changes his proletarian mind into a bourgeois mind. It is superfluous to ask the racists to explain what kind of logic is peculiar to people who are not of pure racial stock. There are much more serious objections to be raised.

Neither the Marxians nor the racists nor the supporters of any other brand of polylogism ever went further than to declare that the logical structure of mind is different with various classes, races, or nations. They never ventured to demonstrate precisely in what the logic of the proletarians differs from the logic of the bourgeois, or in what the logic of the Aryans differs from the logic of the non-Aryans, or the logic of the Germans from the logic of the French or the British. In the eyes of the Marxians the Ricardian theory of comparative cost is spurious because Ricardo was a bourgeois. The German racists condemn the same theory because Ricardo was a Jew, and the German nationalists because he was an Englishman. Some German professors advanced all these three arguments together against the validity of Ricardo’s teachings. However, it is not enough to reject a theory wholesale by unmasking the background of its author. What is wanted is first to expound a system of logic different from that applied by the criticized author. Then it would be necessary to examine the contested theory point by point and to show where in its reasoning inferences are made which–although correct from the point of view of its author’s logic–are invalid from the point of view of the proletarian, Aryan, or German logic. And finally, it should be explained what kind of conclusions the replacement of the author’s vicious inferences by the correct inferences of the critic’s own logic must lead to. As everybody knows, this never has been and never can be attempted by anybody.

Then there is the fact that there is disagreement concerning essential problems among people belonging to the same class, race, or nation. Unfortunately there are, say the Nazis, Germans who do not think in a correct German way. But if a German does not always necessarily think as he should, but may think in the manner of a man equipped with a non-German logic, who is to decide which German’s ideas are truly German and which un-German? Says the late Professor Franz Oppenheimer; “The individual errs often in looking after his interests; a class never errs in the long run.” This would suggest the infallibility of a majority vote. However, the Nazis rejected decision by majority vote as manifestly un-German. The Marxians pay lip service to the democratic principle of majority vote. But whenever it comes to a test they favor minority rule, provided it is the rule of their own party. Let us remember how Lenin dispersed by force the Constituent Assembly elected, under the auspices of his own government, by adult franchise, because only about one-fifth of its members were Bolshevik.

A consistent supporter of polylogism would have to maintain that ideas are correct because their author is a member of the right class, nation, or race. But consistency is not one of their virtues. Thus the Marxians are prepared to assign the epithet “proletarian thinker” to everybody whose doctrines they approve. All the others they disparage either as foes of their class or as social traitors. Hitler was even frank enough to admit that the only method available for him to sift the true Germans from the mongrels and the aliens was to enunciate a genuinely German program and to see who were ready to support it. A dark-haired man whose bodily features by no means fitted the prototype of the fair-haired Aryan master race, arrogated to himself the gift of discovering the only doctrine adequate to the German mind and of expelling from the ranks of the Germans all those who did not accept this doctrine whatever their bodily characteristics might be. No further proof is needed of the insincerity of the whole doctrine.


Social Justice Issues and Reality

I’m currently writing a longer article on the themes touched on by Paul Gottfried in his magnificent Multiculturalism and the Politics of Guilt, and I came across the following quote. I find this particularly important because it’s something that I’ve noticed myself but haven’t quite been able to put into words.

[Richard] Rorty also contends that there is no use asking about “the way the world is” apart from human decisions that affect that world (whatever it may ultimately be). Those who like Plato have posed metaphysical questions were often pushing “authoritarian,” “theocentric” agendas. It is therefore better to work toward improving human affairs than to speculate about the nature of reality. Like self-described pluralists and multiculturalists, Rorty does not shrink back from talking about “social justice” or from identifying that preferred value with those he fancies, although he does insist, like his idol John Dewey, that objective reality is a “relic of Platonic other-worldliness.”

This is a good example of why Jordan Peterson was making little traction with Cathy Newman in the now viral interview. It isn’t just some cheap shot against leftists to say “your views aren’t based in reality.” Sometimes, however, this is a real point: they don’t consider the world as it is. Here is what I said about the Peterson/Newman dual:

Part of the reason for [why there are more male CEOs in the FTSE 100], Peterson explains, is that men tend to have a personality better suited for adapting to the fierce nature of big business competition. It’s an incredibly pressuring world in which individuals do almost anything to get to the top– blood, sweat, tears, exhaustion, bribes, blackmail, and so on. That’s just the way it is. Not only do men seem to be more representative of people with such a personality, there seems to be an increased willingness by men, compared to women, to endure such conditions. Hence, the make-up of the gender representation in these positions. If women are going to achieve these positions and engage in the ferocious battles for corporate power, they need to adopt these traits. This is what Peterson was indicating he has helped women do. This means that Peterson is a realist. He sees the way things are, and he observes that he has prospective clients who want help adapting, and he helps them do it.

Cathy Newman, on the other hand, besides being flustered that Peterson had the audacity to explain the way things are, responded with something to this effect: well what if we can change the culture of the corporate world such that they adapted more of a feminine-friendly environment? Peterson responded as an objective scientist: go for it. I’m just dealing with things as they are.


Robert Reich, Non-Economist

Been thinking about responding more to Robert Reich’s inane videos on Facebook, but I wonder if he is someone worth the time and emotion. He really represents the social democratic narrative in his simplistic, assertion-driven appeals to the economic dolts of society. I did pick up his book, which is not much better than his videos, but perhaps a refutation is on the horizon.

In any case, check this out:

Consider the third sentence, first paragraph.

Now consider the second sentence, third paragraph.

Tax cuts don’t lead to more investment.

Tax cuts lead to more investment.

As written, this is a contradiction of Reichian proportions.

While someone with Neo-Marxist leanings, Reich is also a mercantilist. He thinks that if investments are being made (of course, he never mentions the regulatory disadvantages of investing in the USA) elsewhere around the world, this is somehow a detriment on the American society. However, by increasing the supply of goods in the world economy as a whole, this makes everyone wealthier (except where governments fight back and restrict trade). That is, it is precisely because “money is global” that the economy is global and therefore there is a widespread beneficiary base of the capitalist’s investment.


PFS 2018 Speakers/Topics

Hans Hoppe’s Property and Freedom Society annual meeting for 2018 looks like an interesting lineup of speakers and topics. Nice that Jeff Deist is attending, with a great topic. Interesting that Michael Malice got an invite. The great Paul Gottfried is back and I always love hearing what he has to say.

I dream of one day attending this. I would gladly attend– membership is by invite only, however.


The Court Economists: Justification for Power


The great economists were harbingers of new ideas. The economic policies they recommended were at variance with the policies practiced by contemporary governments and political parties. As a rule many years, even decades, passed before public opinion accepted the new ideas as propagated by the economists, and before the required corresponding changes in policies were effected.

It was different with the “new economics” of Lord Keynes. The policies he advocated were precisely those which almost all governments, including the British, had already adopted many years before his “General Theory” was published. Keynes was not an innovator and champion of new methods of managing economic affairs. His contribution consisted rather in providing an apparent justification for the policies which were popular with those in power in spite of the fact that all economists viewed them as disastrous. His achievement was a rationalization of the policies already practiced. He was not a “revolutionary,” as some of his adepts called him. The “Keynesian revolution” took place long before Keynes approved of it and fabricated a pseudo-scientific justification for it. What he really did was to write an apology for the prevailing policies of governments.

This explains the quick success of his book. It was greeted enthusiastically by the governments and the ruling political parties. Especially enraptured were a new type of intellectual, the “government economists.” They had had a bad conscience. They were aware of the fact that they were carrying out policies which all economists condemned as contrary to purpose and disastrous. Now they felt relieved. The “new economics” reestablished their moral equilibrium. Today they are no longer ashamed of being the handymen of bad policies. They glorify themselves. They are the prophets of the new creed.


George Reisman’s Eulogy for His Wife

George Reisman’s wife Edith Packer has recently passed and he published his eulogy for her here.

Couple interesting tidbits:

Edith was born in a small city called Ushorod. According to her passport, Edith was born in the Ukraine. Actually, she was born in what was then the eastern-most province of Czechoslovakia, called Carpatho-Russia. The Munich Pact in 1938, when Edith was 14, gave that province to Hungary, which held it until 1945, when it became part of the Soviet Union. The Soviet Union made it part of the Ukraine, which was it’s second-most important territory.

From 1920 until April of 1944, Hungary was ruled by a Regent, Admiral Horthy, whose administration could generally be compared to that of Mussolini in Italy. From 1938 to early 1944, Jews could still live in Hungary, but only in an increasingly oppressive environment. They were banned from practicing various professions; Jewish students had to sit in the back of the classroom. Edith, who had been elected president of her class in Gymnasium, was removed from that position because she was Jewish. Toward the end of the period, Jews were compelled to wear yellow stars of David on their clothing. Young Jewish men were drafted into labor battalions, where many of them died, including one of her older brothers, who had been a lawyer and who had been prohibited from practicing his profession. In April of 1944 the conditions of Jews changed from bad to horrible: the Holocaust came to Hungary. Under the direction of Adolf Eichmann, the Hungarian government began rounding up the Jews for deportation to concentration camps and death.

At the age of 19, Edith saw the death camps coming. She urged her parents and the rest of her family to flee. She kept hammering at them with the question of how would the Germans feed them? Why would they feed them? Her family, particularly her parents, had the opportunity to flee. But they chose to stay, stuck like deer in the headlights of an oncoming truck. According to Edith, her mother stayed because she couldn’t bear to give up such things as the familiarity of her home, and her father stayed because he was the leader of the Jews in Carpatho-Russia and believed that leaving would be a betrayal of his fellow Jews.

But Edith fled. And despite his own choice to stay, her father supported Edith’s decision for herself and had a special pair of shoes made for her, which contained a supply of gold coins and diamonds, so that she would not suffer want during her flight. She also found help from a Hungarian senator, who provided her with false papers. This senator became her first husband, and the father of her first child, Eva.

Edith, being blonde and blue-eyed and with false papers was able to avoid being identified as a Jew and succeeded in saving her life. She hid out for the remainder of the war first in Budapest and then across the border in Romania. But she felt guilty about having left her parents. I thought she had overcome the guilt many years ago, but it came back in her final days. I say that any guilt should have belonged to them, not to her. It was they who did wrong in refusing to leave, in refusing not just at the last minute, when it really was too late for them, since, not being blonde and blue eyed, they could easily have been identified as Jews, but much earlier, when the facts were already clear and they chose to ignore them. Edith, did absolutely right in leaving and thus living, not dying.

George Reisman himself is an interesting intellectual. One of the very few living students of Mises himself, he has sought to produce a synthesis between classical economics and Austrianism. David Gordon opines— and I agree with him– that his attempt was unsuccessful. In this way, he is probably not accurately categorized as an Austrian purist. Nevertheless, I very much do appreciate his hard hitting insights and his remarkably blunt attacks against any sign of socialistic narrative. Reisman was very close with another Mises student, historian Ralph Raico, until the two of them split as Raico followed Rothbard out of Ayn Randian circles as Reisman stayed committed. Rand circles, interestingly enough, were where he first met Edith, as he mentions in the eulogy:

Sometimes people ask where I first met Edith. I met her in Ayn Rand’s living room. We were both students in a series of lectures Ayn Rand was giving on non-fiction writing.

Reisman also expresses his Randian-esque hard-shell reflection on death, with an underlying brokenness:

As I’ve said, Edith’s passing has left a great void in me. And my knowledge and commitment to reality and rationality have only made it worse. I know that Edith no longer exists as any kind of actual being. All that physically remains of her is a small pile of ashes. She no longer has eyes and so she cannot see me. She no longer has ears and so she cannot hear me. There just is no longer any “she.” But nevertheless, I pretend that in some way, she still exists and that she can still see and hear me, and so I still talk to her every day. And when I’m alone, out of anyone else’s hearing, I talk to her out loud. So I now need Edith more than ever—as my psychotherapist, in addition to everything else.

But you know what. Until just this last Sunday, I did talk to Edith out loud, in reality, practically every day, for almost half a century. And so it feels much more normal to go on talking to her, even if only in pretense, than to slam into the brick wall of the fact that she simply is no more. So what I think I’m doing is trying to tap the brakes gently, so to speak, and come to a smooth stop, if that’s possible. I don’t think that’s actually unreasonable.

I hope he finds Peace.


H.L. Mencken on the Government’s Money and Services

HL Mencken from his article More of the Same, original published in the American Mercury in 1925:

When a private citizen is robbed a worthy man is deprived of the fruits of his industry and thrift; when the government is robbed the worst that happens is that certain rogues and loafers have less money to play with than they had before. The notion that they have earned that money is never entertained; to most sensible men it would seem ludicrous. They are simply rascals who, by accidents of law, have a somewhat dubious right to a share in the earnings of their fellow men. When that share is diminished by private enterprise the business is, on the whole, far more laudable than not.

The intelligent man, when he pays taxes, certainly does not believe that he is making a prudent and productive investment of his money; on the contrary, he feels that he is being mulcted in an excessive amount for services that, in the main, are useless to him, and that, in substantial part, are downright inimical to him. He may be convinced that a police force, say, is necessary for the protection of his life and property, and that an army and navy safeguard him from being reduced to slavery by some vague foreign kaiser, but even so he views these things as extravagantly expensive – he sees in even the most essential of them an agency for making it easier for the exploiters constituting the government to rob him. In those exploiters themselves he has no confidence whatever. He sees them as purely predatory and useless; he believes that he gets no more net benefit from their vast and costly operations than he gets from the money he lends to his wife’s brother. They constitute a power that stands over him constantly, ever alert for new chances to squeeze him. If they could do so safely they would strip him to his hide. If they leave him anything at all, it is simply prudetially, as a farmer leaves a hen some of her eggs.


The State as a Contradiction in Terms

Ethically, we have in the State, as defined above, a contradiction in terms.  For if the State is the means by which private property is supposed to be ultimately defended, and yet the State declares, independent of the will of the property owner, what the property owner must pay him or be recipient of violent expropriation, then the private property itself, rather than being defended, is threatened.  As Hoppe notes: “However, a tax-funded life-and-property protection agency is a contradiction in terms: an expropriating property protector.”

Moreover, if the State claims unto itself the right to act as the sole provider of its services and actively seeks the elimination of any competitors, then in driving other competitors out of business, here too it contradicts its very intended role.  Any State that allows its citizens to choose another criminal punishment corporation if they desire, that is, any State that does not consider itself as the sole provider of its “services,” cannot last as a State any longer than the citizens allow it. And thus, being essentially a voluntary organization, it loses its status as a State; for States are force, not cooperation.  Therefore, a State must, to retain its label, actively seek the eradication of all jurisdictional competitors; and in doing so, it contradicts its role of defender of private property.  For it must violate the private property of its competitor in order to eliminate it.


The private-law society is one in which all individuals are bound by the same law and there is none who is legally allowed to exempt himself. There is no “public property,” and every owner of property is the ultimate decision maker over the use and restrictions of his property.  There are no public officials who can for “the public interest,” expropriate wealth from the property owner, restrict by force the entrepreneurial activity of the owner in the form of regulations, or create tax-funded bureaucracies, for whatever purpose he has in mind.  No one is allowed to acquire property except by way of original appropriation or voluntary trade; neither is anyone allowed to “prohibit anyone else from using his property in order to enter any line of production he wishes and compete against whomever he pleases.” (Hoppe).

Taken from: http://austrolibertarian.com/the-civil-magistrate-vs-the-state/