Friday, March 31, 2017

Jason Kuznicki VS Adam Smith

Comment on: Not Against Democracy by Jason Kuznicki

*******************************************

Xero:

However well balanced the general pattern of a nation's life ought to be, there must at particular times be certain disturbances of the balance at the expense of other less vital tasks. If we do not succeed in bringing the German army as rapidly as possible to the rank of premier army in the world...then Germany will be lost! - Adolf Hitler
This decision demands a major national commitment of scientific and technical manpower, materiel and facilities, and the possibility of their diversion from other important activities where they are already thinly spread. - John F. Kennedy, Special Message to the Congress on Urgent National Needs

Donors to the Libertarian Party were recently given the freedom to use their donations to signal which potential convention theme is the most urgent/vital/important/necessary/relevant/valuable.  Here are the top results...

$6,222 – I’m That Libertarian!
$5,200 – Building Bridges, Not Walls
$1,620 – Pro-Choice on Everything
$1,377 – Empowering the Individual
$395 – The Power of Principle

The theme "Taxation Is Theft" received $15.42.  Thanks to the Invisible Hand we can all see and know the order (relative importance) of the potential themes.

Democracy, in comparison, simply allows us to see and know how popular something is.  Why is knowing how popular something is more important than knowing how valuable it is?   In your essay you mentioned the market but... for some reason you really didn't consider it to be an alternative to democracy.  Why is that?  Do you not understand how the Invisible Hand makes decisions?  Do you not trust the Invisible Hand to make decisions?  Do you truly believe that the Democratic Hand will make superior decisions?   If so, why?  What is it, exactly, about cheap talk that you find more trustworthy than people's willingness to sacrifice?

What's rather ironic about the potential LP convention themes is the glaring absence of the most important theme... "The Invisible Hand Ordering Things".  Evidently the LP thought that the Invisible Hand was important enough to order the potential themes but not important enough to be one of them.

For whatever reason you didn't include the Invisible Hand as a potential option either.  You carefully compared democracy to some shitty alternatives and then declared democracy to be the winner.

Also, in your essay you said, "...and we let everyone vote. Indeed, we insist on it."  Actually, we don't let kids or foreigners vote.  But for the most part we do let them spend their money.

*****************

Kuznicki: I agree that any society with a high degree of individual liberty would necessarily offer wide scope to invisible hand processes. Many of these are tremendously beneficial, such as the market.

Yet invisible hand processes fare unevenly at times. Robert Nozick argued, I think correctly, that an invisible hand process would give us a monopoly state if we were to start from a condition of anarcho-capitalism. This is far from clearly a positive development.

Within governments, invisible hand processes clearly already take place; the discipline of public choice is devoted to studying them, and it’s produced many valuable insights. Yet I do not understand how you propose to choose candidates for office by an invisible hand process. Do you really mean to auction offices to the highest bidder? Sale of office has been tried in the past, and it did not work out well.

*****************

Xero: Candidates can be chosen exactly like the LP convention theme was chosen.  There would be a list of candidates and people could use their donations to the government in order to signal which candidate is the most valuable.  The Invisible Hand would determine the order (relative importance) of the candidates.

Cato could and should use the same method to choose its CEO/president.  I could make a donation to Cato and use my donation to signal which candidate is the most valuable.  The Invisible Hand would determine the order (relative importance) of the candidates.

An alternative approach would be for the winning side to compensate the losing side.  I could make a payment of any amount to Cato for my preferred candidate.  If my side lost, then not only would I get my money back, but I'd get a proportional slice of the total amount of money spent on the winning candidate.  To see a real life, but rather small, example of this method just google "Classtopia coasianism".  Coasianism is a group trade... which means that it's a win-win situation.  You either get your preferred option... or you get fairly compensated.

Allowing the Invisible Hand to chose the leader of an organization begs the question of the division of decisions between the leader and the Invisible Hand.  Consider the following example...

From my perspective, it's a brilliant idea for the Invisible Hand to determine the order (relative importance) of Cato's papers.  If I make a donation to Cato, I'd love to have the freedom to use my donation to signal the importance of Brink Lindsey's paper "Low-Hanging Fruit Guarded by Dragons".  Everybody should be able to easily see and know which Cato paper is the most valuable.  Just like everybody can now easily see and know which LP convention theme is the most valuable.

Who should decide whether to implement my idea... the CEO of Cato... or the Invisible Hand?  Who is more likely to know the true value of my idea?  Consider this passage from Deirdre McCloskey's book "The Applied Theory Of Price"...

Geoffrey Hellman wrote for the New Yorker magazine for a long time and had incessant quarrels with its editor, Harold Ross, about how little Ross paid a man of Hellman's seniority. Ross insisted that he paid what each piece of writing was worth:  
"You say that you have been here eighteen years and are not treated better than a good writer a couple of years out of college would be, so far as pay for individual articles is concerned... My firm viewpoint is that we ought to pay what a piece is worth, regardless of age, race, color, creed, financial status or any other consideration. I don't know how, in an enterprise of this sort, one in my position can take into consideration anything beyond the actual value of the things."

Imagine if subscribers to the New Yorker used their fees to signal the value of articles.  Who is more likely to know the true value of an article... the Invisible Hand or the editor?

In other words, within an organization... what is the proper division of decisions between the Visible Hand and the Invisible Hand?    Which decisions, if any, would the Visible Hand be better than the Invisible Hand at making?

Right now the Invisible Hand determines the order (relative importance) of all sorts of things... from the frivolous (ie gummy bears) to the serious (ie computers).  So the fact that you, of all people, fail to recognize that the Invisible Hand is a viable alternative to democracy is extremely problematic.  I'm sure that you'd agree that in no way, shape, or form is the Democratic Hand or the Visible Hand better than the Invisible Hand at determining the order (relative importance) of gummy bears and computers.  Therefore, it should be abundantly clear that you really need to get your story straight.

And if it seem evil unto you to serve the Invisible Hand, choose you this day whom ye will serve; whether the Invisible Hand which determines the order (relative importance) of clothes, computers and cars, or the Visible Hand which has determined the  order (relative importance) of the drug war, the terror war and the poverty war, or the Democratic Hand which has determined the order (relative importance) of Gary Johnson, Hillary Clinton and Donald Trump: but as for me... I will serve the Invisible Hand.  I will serve and protect and fight for people's freedom to use their own money to signal the importance of things.

Friday, March 24, 2017

As Opposed To Tilting At Windmills

My comment on Adam Gurri's article... A Critical Defense of Commerce

***************************

There’s quite a bit of goodness in your defense of commerce. However, you really didn’t mention commerce as communication. I just published a blog entry on the subject and tweeted you the link.

Regarding the terms “producer” and “consumer”… you certainly took the time and made the effort to produce this article. Then I took the time to consume it. Yum. Of course I didn’t literally eat your article. So I agree that there are plenty of situations where “consume” doesn’t seem like the best word. There’s always room for improvement.

Regarding a thick moral groundwork versus the assumption of market neutrality…. say that you did allow the Invisible Hand to determine the order of a list of links here on LiberalCurrents. Bob comes along and wants to donate $1000 dollars to put a link to his racist website on the list. Do you accept Bob’s money?

Let’s say that you do accept Bob’s money. In part because the $1000 dollars only places his website towards the bottom of the very long list. However, then Bob’s friends come along and donate lots of money in order to help move Bob’s website up the list. On the one hand, Bob’s racist website is now on top of the list. On the other hand, you ended up with lots of money. That you evidently didn’t spend to put your preferred links above Bob’s link.

Of course I wouldn’t be happy about the outcome. I wouldn’t be happy that the bad guys (them) outspent the good guys (us). But the alternative is to bury my head in the sand. This alternative is not acceptable because I need to see and know the truth… even if it isn’t pretty. I have to follow Socrates into the harsh light rather than remain in the shadowy cave of comfortable delusions.

We can’t tackle the biggest problems with reality if we don’t truly know what they are. Well, in this case the very biggest problem is obviously the system that keeps us in the dark.

Thursday, March 23, 2017

Commerce As Communication

Check out this article by Adam Gurri... A Critical Defense of Commerce.  As usual it starts with a relevant renaissance painting.  Why the renaissance?  Out of curiosity I searched Google images for "renaissance painting market".   I like the paintings... but maybe because I love markets.

I like Gurri's defense of commerce... because I love markets?  

If we think of his article as a market, then it has quite a few products that I'd like to buy.  Unfortunately, his market is missing the one product that I'm most interested in purchasing... commerce as communication

Not too long ago I had an epiphany.  I realized that spending is nonverbal communication.  When we spend our money, we inform others about the intensity of our preferences.  The transmission of information is the definition of communication.  So spending is certainly communication... and it's certainly not verbal communication... which leaves... nonverbal communication.

All my life I've known about spending money... and for pretty much the same amount of time I've also known about nonverbal communication.  So why in the world did I only just recently realize that spending money is nonverbal communication?  

Talk about overlooking the obvious.  

Ok, so Gurri's defense of commerce is entirely missing commerce as communication.  This raises a few really interesting questions...  

  1. Is commerce as communication an important aspect of commerce?
  2. If it is, should it be used in defense of commerce?
  3. If it should, what's the best way to do so?  

Before I try my best to answer these questions, I'd like to say something useful and self-aware about my dynamic with Gurri.  From my perspective, usually it's reasonably constructive.  But then it seems like he invariably takes advantage of his freedom to bravely run away... aka "exit".  So perhaps there's something a bit dysfunctional about our relationship.  Which is unfortunate because I think he's a really intelligent guy who genuinely cares about liberty and writes about it far better than I could ever hope to.

Einstein's definition of insanity is doing the same thing over and over but expecting a different outcome.  Here are most of my previous interactions with Gurri...


Am I insane for trying again?  Well, from my perspective, each attempt was somewhat different.  Plus, as Heraclitus observed... no man steps in the same river twice.  Gurri and I really aren't the same guys that we were in 2016!  Heh.  

In any case, it's not like this is a private e-mail to Gurri.  This is a public blog entry.  So if you are not Gurri... then it's entirely possible that you'll appreciate the value of this information and put it to good use... even if he does not.  My eggs aren't all in one basket.  

Let's get this intellectual party started...

Is commerce as communication an important aspect of commerce?


Well yeah.  Spending money is a sacrifice.  It genuinely matters just how much we're truly willing to sacrifice for things.  As I already pointed out to Gurri, willingness to sacrifice is a central theme in the Bible.

In the beginning of the Bible there’s the story of Cain and Abel. Cain sacrificed some fruit, veggies and grains to God. Abel, on the other hand, sacrificed a lamb to God. Abel was willing to make a bigger sacrifice. From this God divined that Abel felt much deeper gratitude for God’s blessings than Cain did.

A little later on in the Bible, Abraham was willing to sacrifice his only son Isaac to God.  Abraham was willing to make a huge sacrifice.  His willingness to pay (WTP) such a steep price effectively transmitted information about the incredible intensity of his preference for God.  

In the new testament we see the culmination of the idea of sacrifice as communication when God sacrifices his only son in order to save the world.  His WTP effectively transmitted information about the incredible intensity of preference... aka "Love"... for the world.  

Imagine if we replaced the economic definition of "Love" (sacrifice) with the democratic definition of "Love" (voting)... "For God so loved the world that he voted for it..."  This would transmit barely any information about the intensity of God's preference for the world.  We'd be largely ignorant about God's true love for the world.  

For anybody who is interested in a coherent Biblical story... things are a bit tricky.  For sure, we really aren’t mind-readers. However, King Solomon believed that God was a mind-reader… “for thou, even thou only, knowest the hearts of all the children of men.” Clearly this would make sacrifice an entirely unnecessary way for humans to communicate with God.  

The Judeo-Christian religion doesn't have a monopoly on sacrifice as communication between God and man.  Here's a passage from John Holbo's book Reason and Persuasion...

*****************************

Socrates: You could have been much more concise, Euthyphro, if you wanted to, by answering the main part of my question.  You're not exactly dying to teach me - that much is clear.  You were just on the point of doing so, but you turned aside.  If you had given the answer, I would already be well versed in holiness, thanks to you.  But as it is, the lover of inquiry must chase after his beloved, wherever he may lead him.  Once more then: what do you say that the holy is, or holiness?  Don't you say it's a kind of science of sacrifice and prayer?
Euthyphro: I do.
Socrates: To sacrifice is to give a gift to the gods; to pray is to ask them for something?
Euthyphro:  Definitely, Socrates.
Socrates: Then holiness must be a science of begging from the gods and giving to them, on this account.
Euthyphro: You have grasped my meaning perfectly, Socrates.
Socrates: That is because I want so badly to take in your wisdom that I concentrate my whole intellect upon it, lest a word of yours fall to the ground.  But tell me, what is this service to the gods?  You say it is to beg from them and give to them?
Euthyphro: I do
Socrates: And to ask correctly would be to ask them to give us the things we need?
Euthyphro: What else?
Socrates: And to give correctly is to give them in return what they need from us?  For it would hardly represent skill in giving to offer a gift that is not needed in the least.
Euthyphro: True, Socrates
Socrates: Holiness will then be a sort of art for bartering between gods and men?
Euthyphro: Bartering, yes - if you prefer to call it that.

*****************************

We know what we need.  But it's essential that others also know what we need.

It is these needs which are essentially deficits in the organism, empty holes, so to speak, which must be filled up for health’s sake, and furthermore must be filled from without by human beings other than the subject, that I shall call deficits or deficiency needs for purposes of this exposition and to set them in contrast to another and very different kind of motivation. — Abraham Maslow, Toward a Psychology of Being
'Let our herds be so numerous that they cannot be housed; let children so abound that the care of them shall overcome their parents - as shall be seen by their burned hands; let our heads ever strike against brass pots innumerable hanging from our roofs; let the rats form their nests of shreds of scarlet cloth and silk; let all the kites in the country be seen in the trees of our village, from beasts being killed there every day.' - Edward Burnett Tylor, Primitive culture

Words can clearly be used to transmit information about our needs.  However, the problem with words is that they are cheap.  If we want others to truly believe that our needs are genuinely worth taking care of then it's necessary that we substantiate our words with sacrifice.  Sacrifice is solid evidence... it proves that our desire has depth...   

"Old-women's Grandson," ran the words of a Crow Indian's prayer to the Morning Star, "I give you this joint [of my finger], give me something good in exchange...I am poor, give me a good horse. I want to strike one of the enemy and I want to marry a good-natured woman. I want a tent of my own to live." "During the period of my visits to the Crow (1907-1916)," wrote Professor Lowie, to whom we owe the recording of this pitiful prayer, "I saw few old men with left hands intact." - Joseph Campbell, Primitive Mythology

In all cases, if you're going to make a sacrifice to a God, it's entirely reasonable to expect a blessing of greater value in return.  A sacrifice with a less valuable return is a bad deal.  A sacrifice without any return is a total waste.  

Let's switch from considering trade between humans and Gods to considering trade between humans. 

By far the most important depiction of commerce as communication is Adam Smith's Invisible Hand (IH).  Unfortunately most people really think that the IH is simply about the benefits of being selfish.   They are incredibly wrong...

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. — Adam Smith, Wealth of Nations

In a nutshell, the IH is the decentralized process by which people use their own money to identify, quantify and encourage beneficial behavior.  Because again, nobody is a mind-reader.  Society's limited resources can't be efficiently allocated if we don't know the true intensity of people's specific preferences.  

Fast forward to 1944...

The management of a socialist community would be in a position like that of a ship captain who had to cross the ocean with the stars shrouded by a fog and without the aid of a compass or other equipment of nautical orientation. - Ludwig von Mises, Omnipotent Government

In 1945 Friedrich Hayek's essay The Use of Knowledge in Society was published...

We must look at the price system as such a mechanism for communicating information if we want to understand its real function—a function which, of course, it fulfils less perfectly as prices grow more rigid. (Even when quoted prices have become quite rigid, however, the forces which would operate through changes in price still operate to a considerable extent through changes in the other terms of the contract.) The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.

In 1954 Paul Samuelson's paper The Pure Theory of Public Expenditure was published...

But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc.

Accurate signals are just as important for public goods as they are for private goods.  But because of the very nature of public goods, it's possible to benefit from them without paying for them.  The standard solution to the free-rider problem is compulsory taxation.  However, simply forcing people to pay taxes does not create accurate signals for public goods.  

In 1963 James Buchanan had the incredible epiphany that people could use their taxes to honestly communicate the true intensity of their preferences for public goods...

Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes

If you subscribe to Netflix anyways, then you might as well use your fees to accurately communicate the true intensity of your preference for nature documentaries.  Except, Netflix subscribers obviously don't have the freedom to use their fees to communicate the intensity of their preferences for specific content.  The same is true of people who "subscribe" to the government... aka "taxpayers".  Why don't subscribers have this freedom?

In 1981 Murray Rothbard's essay The Myth of Neutral Taxation was published...

The charity serves the purposes of the donors, and these purposes are in turn to help the poor. But it is the donors who are consuming, the donors who are demonstrating their preference for sacrificing a lesser benefit (the use of their money elsewhere) for a greater (giving money to the charity to help the poor). It is the donors whose production decisions guide the actions of the charity.

Donors use their donations to inform the decisions of non-profits.

Rothbard failed to appreciate that taxpayers could use their taxes to inform the decisions of government.  Evidently he overlooked Buchanan's 1963 paper.  If Buchanan's insight had been applied to academic papers, then subscribers would have used their fees to communicate the importance of specific papers, and logically they would have been willing to sacrifice a considerable amount of fees to Buchanan's paper.  Then it would have been very unlikely that Rothbard and others would have overlooked Buchanan's valuable paper.

Humans (and their Gods) really aren't the only ones who use sacrifice to communicate the intensity of their preferences...

Today’s Mandeville is the renowned biologist Thomas D. Seeley, who was part of a team which discovered that colonies of honey bees look for new pollen sources to harvest by sending out scouts who search for the most attractive places. When the scouts return to the hive, they perform complicated dances in front of their comrades. The duration and intensity of these dances vary: bees who have found more attractive sources of pollen dance longer and more excitedly to signal the value of their location. The other bees will fly to the locations that are signified as most attractive and then return and do their own dances if they concur. Eventually a consensus is reached, and the colony concentrates on the new food source. — Rory Sutherland and Glen Weyl, Humans are doing democracy wrong. Bees are doing it right

Obviously bees can’t spend money… but they can spend something that’s precious to them… their calories. So WTP is just as relevant for bees as it is for humans.

What about ants?

In Experiment 1 colonies distributed a greater proportion of their foragers towards the higher quality resource. This behaviour supports work by Sumpter and Beekman (2003) on M. pharaonis and is typical of this mass-recruiting species (Jackson et al. 2004; Jackson and Châline 2007; Evison et al. 2012b). The stronger allocation of workers to higher quality feeders is most likely due to a greater pheromone trail laying intensity by ants coming from these feeders (Jackson and Châline 2007) leading to faster exploitation of the higher quality food source via positive feedback influencing the decision by nestmates to lay pheromone trail (Sumpter and Beekman 2003; von Thienen et al. 2014). A greater disparity in quality should create greater disparity in foraging effort between two food sources, a simple behaviour that is integral to colony survival (Stroeymeyt et al. 2010), and this is indeed what we found (Fig. 2). — R. I’Anson Price, C. Grüter, W. O. H Hughes, S. E. F. Evison, Symmetry breaking in mass-recruiting ants: extent of foraging biases depends on resource quality

It takes precious calories to produce pheromones… so an ant’s willingness to spend their pheromones is the equivalent of a human’s willingness to spend their money.

Is it a coincidence that WTP is integral to ants, bees, humans and Gods?

With numerous widely dispersed and incredibly diverse individuals in complex and changing environments… commerce as communication is necessary to help minimize the chances that valuable things will be overlooked.

From ants to bees to Gods to Socrates to Abraham to Smith to Mises to Hayek to Samuelson to Buchanan to Rothbard... it should be abundantly clear that commerce as communication is an incredibly important aspect of commerce.

Should commerce as communication be used in defense of commerce?


Well yeah.  I don't think it's truly possible for people to fully understand and appreciate the incredible necessity and benefit of commerce if they don't clearly see it as communication.   

What's the best way to use commerce as communication in defense of commerce?


The best way to use commerce as communication in defense of commerce is to use commerce to bring commerce as communication to everybody's attention.

It will be pretty easy to bring this blog entry to Gurri's attention.  I'll simply go on Twitter, create a tweet with a link to this entry and mention Gurri in the tweet.  Voila!  He'll receive a notification and see my tweet.  Maybe he'll say to himself, "Oh no, not this guy again!" and ignore the link.  But if he does click on the link then he'll see this blog entry.

Perhaps he'll appreciate that I sacrificed a decent amount of time to create this entry.  However, this really won't adequately inform him of the true intensity of my preference for commerce as communication.

And yeah, I could definitely paypal Gurri $100 dollars.  Sacrificing $100 dollars would better inform him of my love for commerce as communication.  But would it better inform others?  Well...I could publicly announce my sacrifice to Gurri.  However, there is a better way.

Gurri has a brand new website... LiberalCurrents (LC).  It's so shiny and pretty.  Most importantly, it has that new website smell.  I know for a fact that Gurri loves the smell of new websites because creating new websites is his favorite thing.

On the LC homepage you'll see renaissance paintings and links to articles on the website.  But you know what I'd really love to see on the LC homepage?  I'd love to see a link to this blog entry!  I'd also love to see a link to Smith's Wealth of Nations and a link to Hayek's Use of Knowledge in Society and a link to Buchanan's Economics of Earmarked Taxes and and and... it's actually a pretty long list.

I created a Google sheet with a preliminary list and wrote some code to embed it on this page.  Gurri could easily embed the code for this list into LC's homepage or into some other prominent page.

The most important question is... how should the list be ordered???   The list of links should be ordered by their value.  In order to determine their value we can make donations to LC and use our donations to communicate the intensity of our preferences for specific links.  We'd be using commerce as communication in order to bring commerce as communication to everybody's attention. 

Also, we'd be helping to minimize the chances that people interested in liberty will overlook valuable information.  So it will be just like our very own Twitter... if the founder of Twitter hadn't overlooked Smith's Wealth Of Nations and Buchanan's Economics Of Earmarked Taxes.

We'll prioritize how we spend our limited money in order to help each other prioritize how we spend our limited time.

It might seem like information overload is a relatively new phenomenon.  But there's always been far more information than time to process it all.  It's only natural that our attention is drawn to the sacrifices that other people are willing to make.  In this regard, it definitely makes sense that the Bible managed to capture so many people's attention.

If we want to direct people's attention to commerce as communication... then we gotta make some sacrifices.  We can make donations to the LC and use our donations to determine the order of liberty links.

There are certainly a few logistical issues... such as... how does Gurri valuate links?  Clearly he can't simply take money out of his pocket and put it right back in!  So he'd have to figure out who to donate money to in order to communicate the intensity of his preferences for specific links.

As far as precedent is concerned... it shouldn't come as a surprise that it's pretty meager.

Based on my suggestion, a few months back my friend gave her 4th grade students the opportunity to use their donations to reveal the intensity of their preferences for their favorite books.

More recently, donors to the Libertarian Party were given the opportunity to use their donations to reveal the intensity of their preferences for their favorite potential themes.

In both cases the lists were ordered by the IH.  However, in the first case the IH was a lot smaller.

In the private sector, the IH determines the order of countless things... from frivolous things (ie gummy bears) to serious things (ie computers).  So it really shouldn't be necessary to make the case for using the IH to order a list of liberty links.  Then again, as far as I know, there are only two lists in the world that are ordered by the IH!  Therefore, commerce is certainly in need of a really strong defense.

It would be an incredibly powerful defense of commerce if Gurri used the LiberalCurrents website to allow the IH to order a list of liberty links.  Plus, the name of the website is certainly appropriate!  We'd all guide, and be guided by, the constantly changing currents of liberalism.

Yes, change is the basic law of nature. But the changes wrought by the passage of time affects individuals and institutions in different ways. According to Darwin’s Origin of Species, it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself. Applying this theoretical concept to us as individuals, we can state that the civilization that is able to survive is the one that is able to adapt to the changing physical, social, political, moral, and spiritual environment in which it finds itself. — Leon C. Megginson

Correctly and rapidly adjusting/adapting to constantly changing circumstances/conditions depends on accurate and efficient communication.  This is why commerce as communication is so incredibly important.

Wednesday, March 22, 2017

Clarifying The Invisible Hand

Reply to story: The “Helping Hand” vs. The “Fighting Fist” by J.G. Sandom

********************************************

The Invisible Hand isn’t primarily about selfishness. It’s primarily about using our money to communicate just how helpful a producer is being. The fundamental assumption is that nobody is a mind-reader.

Here I am spending my time and using my brain to try and help you. But obviously I can’t “divine” whether you consider my effort on your behalf to be truly helpful. The only way that I can possibly have this information is if you share it with me.

For example…

“Hey guy, you were helpful!”

“Hey guy, you weren’t helpful!”

If you do benefit from my help… then the issue is quantifying your benefit. Quantifying your benefit is necessary because there are plenty of other people that I can spend my time trying to help.

Here are some examples of quantifying your benefit…

“Hey guy, you were fairly helpful!”

“Hey guy, you were very helpful!”

“Hey guy, you were extremely helpful!”

The problem with this method is that talk is cheap. Therefore… you gotta provide some supporting evidence…

“Hey guy, you were fairly helpful! Have a penny!”

“Hey guy, you were very helpful! Have $5 dollars!”

“Hey guy, you were extremely helpful! Have $100 dollars!”

Except, why buy the cow when you can get the milk for free? This is why taxation is compulsory rather than voluntary.

Quick review…


  1. Because I’m not a mind-reader, it’s necessary for you to inform me whether or not you find my behavior helpful.
  2. Because there are other people that I could be helping, it’s necessary for you to quantify your benefit.
  3. Because words are cheap, it’s necessary for you to spend your money in order to prove just how much benefit you’re deriving from my help.
  4. Because of the free-rider problem, if I freely offer you my help then you clearly have an incentive to hide your true estimate of my help’s value.


Let’s say that each month every member of Medium paid $1 dollar. However, we’d be free to choose which stories we spend our fees on. In this case, if you did benefit from my help, then you might as well use your money to communicate and quantify your benefit. The more of your fees that you were willing to spend on my reply, the more helpful that you found it to be.

Imagine every member of Medium using their fees to accurately communicate how much benefit they derived from each other’s stories. Then we’d know the relative importance of each other’s stories. We’d know just how relatively important economic stories were and we’d use this information to make more informed decisions.

The relative importance of all the stories would be determined by the Invisible Hand. So the Invisible Hand is primarily about everybody using their money to identify and reward beneficial behavior.

Is selfishness relevant to the Invisible Hand? Well yeah. We all want to be rewarded. Clearly we’re going to have a strong incentive to write about the most important/valuable topics. But this is a good thing because these are the topics that people are most interested in reading and learning about.

With all of this in mind, here is the most relevant passage from the Wealth of Nations

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. — Adam Smith, Wealth of Nations

In a nutshell, the Invisible Hand is the decentralized process by which people use their money to identify, quantify and encourage beneficial behavior.

I hope you found this helpful! Please let me know if you have any questions.

My Well-Being Depends On Artichokes!

Reply to reply: No Such Thing As A Free Lunch

*****************************************

Thus the government may fund things that a business would never fund because it increases the well being of a population, even though it may represent an opportunity cost or seem like it has little utility to the opposition. - Northern Light

You expect congress to make public goods choices with due consideration for my well-being. My well-being? In the private sector I have to spend so much time and energy going around informing producers what works for my well-being. I shop and shop and shop. For example, I go to the store and buy some artichokes. In doing so I tell Frank the farmer, "Hey! You correctly guessed that my well-being depends on artichokes! Thanks! Good lookin' out! Here's some money! Keep up the good work!"

Yet here you are telling me that congress can somehow know what works for my well-being despite the fact that I've never once in my life shopped in the public sector. It boggles my mind. It blows my mind. It bears repeating with emphasis... congress can know what works for my well-being despite the fact that I've never once in my life shopped in the public sector. If you think that this is really true... then please... don't hide your insight under a bushel. Start a thread here, there and everywhere and say "Hey folks! Shopping is entirely redundant! It's entirely unnecessary for us to spend so much of our limited time and energy using our cash to communicate what works for our well-being."

Then again, it pays to double check. E-mail your representative and ask them what works for your well-being. If they say general things like food and defense are you going to be super impressed? Are you super impressed when a fortune teller makes "divinations" that are so vague and general that they pretty much apply to everyone?

The market is based on the premise that producers really aren't mind-readers. So in order for the well-being of the population to truly increase, there has to be constant monetary communication between consumers and producers. You gotta use your hard-earned money to specify exactly what works for your well-being. You gotta use your money to advocate for yourself. Because nobody knows you better than you do.

Monday, March 20, 2017

The Opportunity Cost Of Market Ignorance

Today on Twitter I saw this tweet from William Easterly...




Here's the image again...





It most certainly is a great illustration, by Bill Bramhall, of the opportunity cost of government spending.  A tax dollar that is given to building a big wall is one less tax dollar that can be given to The National Endowment For The Arts (NEA).  Then again, a tax dollar that is given to the NEA is one less tax dollar that can be given to public education and public healthcare and space exploration and environmental protection and... it's a long list.  Here's how I've illustrated this...




More public art means less community gardens and less computers for needy schools and less meals on wheels for the elderly and disabled.

For way too long I was quite certain that the problem with society is that people really didn't understand the opportunity cost concept.  But then I had to accept the fact that even Paul Krugman grasps the opportunity cost concept.  So does my favorite liberal economist John Quiggin!  What Krugman and Quiggin and even Easterly really do not grasp is the benefit of everybody deciding for themselves, with their own tax dollars, which trade-offs are acceptable.

Everybody deciding for themselves, with their own money, which trade-offs are acceptable?  Does that sound familiar?  It should.  It's pretty much the definition of a market.  Which means that Krugman and Easterly and Quiggin really do not grasp the benefit of markets.

So the question is... how do you effectively illustrate the benefit of markets?

Also seen on Twitter today...




Public broadcasting?  Isn't that what happens in a market?  Don't we all prioritize using our own limited money to publicly broadcast the relative importance of our specific needs and wants?

Somehow I ended up on this Guardian article... Does Netflix changing its rating system matter? No, because people are still awful.  Netflix is planning to switch from a 5 star rating system to a thumbs up/down system.  Cheap talk is being replaced with... cheap talk.  Stuart Heritage is happy to judge people on the basis of their cheap talk.

Why doesn't Netflix simply give its subscribers the option to divide their fees among all the content?  Every subscriber would decide for themselves, with their own fees, which trade-offs are acceptable.  Is Krugman going to share this idea with Netflix?  Nope.  Is Quiggin?  Nope.  Is Easterly?  Nope.  Because again, none of them really grasp the benefit of markets.

At the end of the Guardian article I saw my favorite part...





Why doesn't the Guardian give supporters the option to divide their contributions among all the content?  Every supporter would decide for themselves, with their own money, which trade-offs are acceptable.  Is Krugman going to share this idea with the Guardian?  Nope.  Is Quiggin?  Nope.  Is Easterly?  Nope.  Because again, none of them really grasp the benefit of markets.

Another Guardian article caught my attention... Yuval Noah Harari: ‘Homo sapiens as we know them will disappear in a century or so’.  How intelligent is Harai?  How intelligent are all those people who asked him questions?






Do you like this juxtapose as much as I do?  Can you imagine the caveman who used his time and talent to create that painting?  He noticed that other cavemen sure seemed to spend a lot of time staring at his painting.  And he thought to himself... if they use it, if they like it, then why don't they pay for it?  It's only fair.  Then he shouted, "Make a contribution!!!" and clubbed them over their heads and took some of their Wooly Mammoth meat.

Here we are 10,000 years later still not intelligent enough to figure out that markets can work just as well for public goods as they do for private goods.

Fucking stone ages.

The opportunity cost of market ignorance is immense.  But there's hope.  The Libertarian Party is giving donors the chance to dollar vote for their preferred convention theme.  Every donor can decide for themselves, with their own money, which trade-offs are acceptable.  Unfortunately, and strangely, "The Invisible Hand Ordering Things" really isn't one of the potential themes.  So maybe we shouldn't get our hopes up.

Saturday, March 18, 2017

A Scrap Of Pragmatarian History

Inspired by David Friedman's post... A Scrap of Libertarian History... I decided to share a scrap of anarcho-capitalist, libertarian and pragmatarian history.

Seven years ago I was still pretty much a libertarian.  When I happened to check out the Wikipedia page for Libertarianism... I was really not happy with what I saw.  Here's what I wrote on the Talk page...

Strongly agree! "others striving for complete abolition of the state" Holy crap! Don't say "others" say..."one guy who wrote a book". It's completely ignorant to even mention it at all, especially in the first paragraph. Libertarianism is based on the simple concept that the freedom to swing your fist ends where somebody else's nose begins. If you punch somebody in the nose...then what? If you can get away with it then you have anarchism but if you're punished then you have libertarianism. Obviously you need some form of government in order to enforce that rule. The first paragraph was so completely off base and misleading that I replaced it with a quick substitute in the meantime. 97.93.109.174 (talk) —Preceding undated comment added 22:46, 15 July 2010 (UTC).

What did I know about anarcho-capitalism?  Not much!  But I was sure that anarcho-anything really did not sit well with me and I endeavored to try and fix the page on libertarianism.  Of course the an-caps weren't really happy with my efforts to kick them off the page.

One of the an-caps went to my talk page and tried to school me...

*******************************

Libertarianism is based on the simple concept that the freedom to swing your fist ends where somebody else's nose begins. If you punch somebody in the nose...then what? If you can get away with it then you have anarchism but if you're punished then you have libertarianism. Obviously you need some form of government in order to enforce that rule.

'Obviously'? Have you studied the issue? For a thousand years, then, ancient Celtic Ireland had no State or anything like it. As the leading authority on ancient Irish law has written: “There was no legislature, no bailiffs, no police, no public enforcement of justice.... There was no trace of State-administered justice.”[Joseph R. Pedea] For a New Liberty: A Libertarian Manifesto, Rothbard

For reference...see http://www.DownsizingGovernment.org/ Notice the website name? It's not called AbolishingGovernment.org

There are many billion websites on the internet. For example, http://www.abolishgovernment.com/

Wow. I just looked through some of the discussion on this page...you should be nominated for sainthood. Are you an elementary school teacher? Or do you work with the mentally challenged?

Is this civilized discussion?

...if we were any good at collective action the anarchists wouldn't be peeing all over our page.

'Peeing'? And what is 'our' page? You say you used 'your' because you call yourself a Libertarian. How do you know that others (your 'antagonists') don't? And wouldn't this 'bias' the page?

Anarchism...murder, mayham, rape, pillage, plunder, etc.

Have you studied the issue? How can you claim this? Common Sense may mislead! I suggest, and hope, that you will read more about Anarchism, specially why the proponents say it will work. In particular, if individuals have right to defend themselves, all that you name will (probably) not happen. Check this: http://flag.blackened.net/ Concerning Libertarianism, [Don B.] Kates makes another intriguing point: that a society where peaceful citizens are armed is far more likely to be one where Good Samaritans who voluntarily go to the aid of victims of crime will flourish. But take away people’s guns, and the public—disastrously for the victims—will tend to leave the matter to the police. Before New York State outlawed handguns, Good Samaritan instances were far more widespread than now. And, in a recent survey of Good Samaritan cases no less than 81% of the Samaritans were owners of guns. If we wish to encourage a society where citizens come to the aid of neighbors in distress, we must not strip them of the actual power to do something about crime. Surely, it is the height of absurdity to disarm the peaceful public and then, as is quite common, to denounce them for “apathy” for failing to rush to the rescue of victims of criminal assault. (from the Rothbard's book named earlier)

Wait...I thought our secret plan was to copy ...

This in not 'your' page.

Do us all a favor and focus your energies on editing the page on Anarchism.

Talk only for yourself, not us all.

You are an Anarchist vandalizing a page on modern Libertarianism.

The use of 'vandalizing' is bad. At least she is civil, while you are raging with some holy anger. Besides, see the next comment (here).

You and others have been completely reasonable with her for a really really long time but the line has to be drawn somewhere.

Are you trying to frighten her? And a logical error: if the behavior is 'reasonable', how is it wrong?
I suggest two things here (which you are free to not accept): form an opinion only after studying the issues, and be civilized in talking.

—Preceding unsigned comment added by N6n (talk • contribs) 05:04, 23 July 2010 (UTC)


  • Celtic Ireland? Talk about regressive. Give everybody guns and we'll be living in a spaghetti western where justice is administered by a posse. In the Army I carried big guns around all the time and it's not nearly as fun as it sounds. Self-actualization should not be dependent on how well you shoot.
  • Rothbard holds an extreme point of view that should not be given any weight on the page on Libertarianism.
  • Yes, there are a billion websites on the internet and the problem with you and CarolMooreDC is that both of you would give equal weight to both of those websites. However, only one of those websites is run by the fifth most influential think tank in the world.
  • No, I wasn't trying to frighten her. And the logical error was yours for not realizing whose behavior I was calling "reasonable".
  • I understand both sides of the issue and have shared my thoughts in a civilized manner in this section... Talk:Libertarianism#Common_Ground 
  • --97.93.109.174 (talk) 21:39, 23 July 2010 (UTC)


Hello, I suppose guns were not restricted when the US gained independence. Anyway, the outlaws heed no gun-control laws, so, in effect, only the law-abiding people are deprived of guns. Do you know that 80% of the murders committed on the street go unpunished? [1] Perhaps lesser stranger-crimes will happen if the would-be criminal would expect a potential victim to be armed. (And I've heard that the 'Western' is a myth, the real life was not like what the Hollywood portraits.)
Anyway, gun-control is just one issue. What about the ever-expanding bureaucracy (for example, the IRS), wars half-way around the world, unchecked printing of paper-money, huge public debt, government spying, etc. If it looks possible to live without a government, we ought to look into it. N6n (talk) 12:34, 24 July 2010 (UTC)

Libertarianism is of course against gun control...so you're preaching to the choir. However, I lived in Afghanistan for a year and tribalism is the natural consequence of Rothbard's idea of completely getting rid of the state. Tribal warfare is inevitable because the grass is always greener on the other side. A state has to exist with enough power to enforce laws and protect people from the largest and strongest organizations and countries. So at a very minimum you need an army, police, courts and prisons. --97.93.109.174 (talk) 21:56, 25 July 2010 (UTC)


I agree with all your points about Afghanistan. But what is true for A. is not necessarily true for the US. Karl Popper's Open Society v. tribalism distinction is useful here. People in A. are loyal and subservient to their tribe, as far as my understanding goes. This is no basic for a republic, let alone anarchy. Change in consciousness does not happen overnight, the West has had 500 years of Enlightenment, give A. a couple of centuries too!

Rothbard's society will (probably) not be a return to tribalism. The powerful will not seize power, for there will be no power to seize. If you are concerned about couple of powerful people uniting and then forcing everyone else to serve their will, consider that (i)this will be very difficult (as free people will not agree to become subservient overnight), and that (ii)what stops the oligarchs in democracy(nothing, in my opinion).

And an earlier point: you said that Rothbard "holds an extreme point of view" and thus should not be given weight. Is being an "extremist" wrong per se? Quoting William Lloyd Garrison “Gradualism in theory is perpetuity in practice.” And allow me to point once again that you have not studied how such a society is supposed to work.
Are such stable and consistent law codes possible, with only competing judges to develop and apply them, and without government or legislature? Not only are they possible, but over the years the best and most successful parts of our legal system were developed precisely in this manner. Legislatures, as well as kings, have been capricious, invasive, and inconsistent. They have only introduced anomalies and despotism into the legal system. In fact, the government is no more qualified to develop and apply law than it is to provide any other service; and just as religion has been separated from the State, and the economy can be separated from the State, so can every other State function, including police, courts, and the law itself! 
As indicated above, for example, the entire law merchant was developed, not by the State or in State courts, but by private merchant courts. It was only much later that government took over mercantile law from its development in merchants’ courts. The same occurred with admiralty law, the entire structure of the law of the sea, shipping, salvages, etc. Here again, the State was not interested, and its jurisdiction did not apply to the high seas; so the shippers themselves took on the task of not only applying, but working out the whole structure of admiralty law in their own private courts. Again, it was only later that the government appropriated admiralty law into its own courts. 
Finally, the major body of Anglo-Saxon law, the justly celebrated common law, was developed over the centuries by competing judges applying time-honored principles rather than the shifting decrees of the State. These principles were not decided upon arbitrarily by any king or legislature; they grew up over centuries by applying rational—and very often libertarian—principles to the cases before them. The idea of following precedent was developed, not as a blind service to the past, but because all the judges of the past had made their decisions in applying the generally accepted common law principles to specific cases and problems. For it was universally held that the judge did not make law (as he often does today); the judge’s task, his expertise, was in finding the law in accepted common law principles, and then applying that law to specific cases or to new technological or institutional conditions. The glory of the centuries-long development of the common law is testimony to their success. [Rothbard, For a New Liberty: A Libertarian Manifesto]
N6n (talk) 03:37, 26 July 2010 (UTC)

The United States is composed of an incredibly diverse group of people. We have different races, different levels of education and wealth, different religions, different political views...we all coexist in relative stability not in spite of the state...but because of the state. Take away the state and people will reorganize themselves into tribes...or communities...that will invariably disagree over resources/ideology and conflict will ensue. Then what? Will one community pay for conflict resolution or will they pay for additional mercenaries to attack the other community? If a court consisting of volunteers finds one side in violation of the non-aggression axiom will a posse of volunteers saddle up to administer justice?

That Rothbard was willing to push the theoretical button that would have instantly eliminated the state is a testament to how fanatical he was. Is being "extremist" wrong? Well...that's not really the question. The question is whether his fanaticism has any relevance to modern Libertarianism...and the answer to that is a resounding no. He was an anarcho-capitalist who trusted that incentives exist for the private sector to provide every single public good. --97.93.109.174 (talk) 11:40, 26 July 2010 (UTC)

The critical idea here is that aligning yourself in such groups is “bad for business”. Businessmen are known to “betray” their countries by doing illegal business with their “enemies”, even during wars. (a notorious example: Rothschilds funding both British and French governments during the Napoleonic wars.) Besides, why what you envision does not play out on the inter-national level? Business! Rothbard says on a similar problem:
But what of personal, rather than strictly economic, “discrimination” by the landlord? Suppose, for example, that the landlord is a great admirer of six-foot Swedish-Americans, and decides to rent his apartments only to families of such a group. In the free society it would be fully in his right to do so, but he would clearly suffer a large monetary loss as a result. For this means that he would have to turn away tenant after tenant in an endless quest for very tall Swedish-Americans. While this may he considered an extreme example, the effect is exactly the same, though differing in degree, for any sort of personal discrimination in the marketplace. If, for example, the landlord dislikes redheads and determines not to rent his apartments to them, he will suffer losses, although not as severely as in the first example. In any case, anytime anyone practices such “discrimination” in the free market, he must bear the costs, either of losing profits or of losing services as a consumer. If a consumer decides to boycott goods sold by people he does not like, whether the dislike is justified or not, he then will go without goods or services which he otherwise would have purchased.[For a New Liberty] 
This would need that people care more for their profits than for building utopian societies. But that is so, and is it not what capitalism is most denounced about? It is businessmen (i.e., people as businessmen) that keep the rulers madness into check.

For a 'vision' of how things will proceed if the State collapses without preparation (the hypothetical button), check a novel by J. Neil Schulman-- Alongside Night. http://www.alongsidenight.net/ —Preceding unsigned comment added by N6n (talk • contribs) 13:26, 26 July 2010 (UTC)


How can you honestly support a model where everybody's behavior is determined by whether something was bad for business? Yes, if that were the case then maybe a stateless society might work. In our current society though, people are like kids that recognize the need for adult supervision. We elect representatives to look out for our best interests. The fundamental flaw in Rothbard's vision was he that totally assumed that just because he views the state as coercive...so must everybody else. They don't...they see it as a division of labor that allows them to worry about other things. They see it as the product of 500 years of "Enlightenment". For them taxes are not robbery...taxes are payment for the public goods and services that they use on a daily basis. Taking away the state would be tantamount to tyranny of the very very very small minority.

Before you can contemplate alternative structures to society...it's essential that you have a firm grasp on how and why our current structure works. A good starting place is the book Democracy in America by Alexis de Tocqueville. --97.93.109.174 (talk) 21:22, 26 July 2010 (UTC)

(i) Everything determined by "business": I don't say that everything will be kosher with a stateless society, but we only have to worry whether it will be better. Please read the third and fourth paragraph here: [2] (summary of Karl Popper's views on Open Society v. tribalism)

(ii) people are like kids that recognize the need for adult supervision: This description will fit most people I know too. But my primary responsibility is to myself.

(iii) they see it as a division of labor that allows them to worry about other things: Why stop here, clothes and shoes are also essential. Why should government not manufacture them? (if it can be shown that the market can take care of law and order) Imagine the argument a couple of centuries back (everywhere), or even now in fully tribal societies. Who would believe that clothes can be taken care of by the market, or that the market can supply a rich (and abundant) variety of goods. Wouldn't competing merchants cause chaos? Some rich merchant would buy all bales of cotton/milk produced, and nobody will have clothes in the winter!

(iv) For them taxes are not robbery...taxes are payment for the public goods and services that they use on a daily basis: This is wrong. All this a monarch would also claim. Besides, Rothbard [Ethics of Liberty]:

It would be an instructive exercise for the skeptical reader to try to frame a definition of taxation which does not also include theft. Like the robber, the State demands money at the equivalent of gunpoint; if the taxpayer refuses to pay his assets are seized by force, and if he should resist such depredation, he will be arrested or shot if he should continue to resist. It is true that State apologists maintain that taxation is "really" voluntary; one simple but instructive refutation of this claim is to ponder what would happen if the government were to abolish taxation, and to confine itself to simple requests for voluntary contributions.Does anyone really believe that anything comparable to the current vast revenues of the State would continue to pour into its coffers? It is likely that even those theorists who claim that punishment never deters action would balk at such a claim. 

(v) tyranny of the very very very small minority: Stateless society is the end of the road for decreasing State power. Voluntary exchange directly between people, the market, now manages to take care of much of societal needs. I think that a Stateless society, if possible, will be good. But, even if it isn't possible, it is well to keep that as an ideal. Read Thoreau's essay Civil Disobedience if you wish.

(vi) I will read the de Tocqueville book. N6n (talk) 04:14, 27 July 2010 (UTC)

When Rothbard claims that the state is a robber...how come so few people agree? Robbery is a pretty straightforward concept. How come there hasn't been a second American Revolution? The answer is simply that now we have representation. We elect representatives to decide how much taxes we should pay and what our taxes should be spent on...so it's absurd to claim that we are robbing ourselves.

Every society needs leaders. In Rothbard's society some people would want to log Yellowstone while others would want to turn it into a national park. Each group would have their own leaders so how would the dispute be settled? The Libertarian law wouldn't be relevant because it's entirely based on the non-aggression axiom.

Did you read the Open Society vs Tribalism document in its entirety? This passage by Burke was included. It's pretty decent as long as you notice the "not"s.

Society is indeed a contract. Subordinate contracts for objects of mere occasional interest may be dissolved at pleasure---but the state ought not to be considered as nothing better than a partnership agreement in a trade of pepper and coffee, calico or tobacco, or some other such low concern, to be taken up for a little temporary interest, and to be dissolved by the fancy of the parties. It is to be looked on with other reverence; because it is not a partnership in things subservient only to the gross animal existence of a temporary and perishable nature. It is a partnership in all science; a partnership in all art; a partnership in every virtue, and in all perfection. As the ends of such a partnership cannot be obtained in many generations, it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born

Pure individualism or self-interest might result in Yellowstone being logged and/or developed...but part of the value of a government is in its ability to make decisions that won't screw over future generations. So rather than trying to get rid of the state...the goal should be improving the "partnership" aspect of the state. --97.93.109.174 (talk) 12:05, 27 July 2010 (UTC)


On what basis does the government decide what is best for future generations? It doesn't have a code external to the society itself--its values are the societal values. (Pure) Capitalism advocates would claim that if not for government restrictions(which facilitates monopoly, btw), the market would be fluid enough to make sure that societal wishes are followed. So, e.g., if the people of US do not want Yellowstone to be logged, they will show this by making decisions on the market which will affect the parties involved. (e.g., increase in entry cost to the National Park) The owner of Yellowstone would base his/her decision simply on whether using it as a recreational ground/ecological sanctuary is more profitable than logging it. This profit includes the owner's intangible but quantifiable moral values. (e.g., people paying more for green products.) Ludwig von Mises argues all this convincingly. I will post relevant quotes here when I next come across them. But right now, I have access to one from Rothbard:

This sort of argumentation reflects a general double standard of morality that is always applied to State rulers but not to anyone else. No one, for example, is surprised or horrified to learn that businessmen are seeking higher profits. No one is horrified if workers leave lower-paying for higher-paying jobs. All this is considered proper and normal behavior. ... What gives the gentlemen of the State apparatus their superior moral patina? [For a New Liberty]

Who decides how much Oil to produce? Why hasn't Oil been exhausted till now? Those supporting laissez faire claim that all that is good is due to autonomous-agents, and all that is bad is due to government's interference.

how come so few people agree: This is not at all difficult to explain. How about Noam Chomsky's Manufacturing Consent. Rothbard [FaNL] has something relevant:

On the one hand, the stations, since they receive the licenses gratis, do not have to pay for the use of the scarce airwaves, as they would on the free market. And so these stations receive a huge subsidy, which they are eager to maintain. But on the other hand, the federal government, as the licensor of the airwaves, asserts the right and the power to regulate the stations minutely and continuously. Thus, over the head of each station is the club of the threat of nonrenewal, or even suspension, of its license. In consequence, the idea of freedom of speech in radio and television is no more than a mockery. Every station is grievously restricted, and forced to fashion its programming to the dictates of the Federal Communications Commission. So every station must have “balanced” programming, broadcast a certain amount of “public service” announcements, grant equal time to every political candidate for the same office and to expressions of political opinion, censor “controversial” lyrics in the records it plays, etc. For many years, no station was allowed to broadcast any editorial opinion at all; now, every opinion must be balanced by “responsible” editorial rebuttals.

Just to clarify, I won't press the hypothetical button. I first need to be sure that a Stateless society would be better (which I am not).
N6n (talk) 13:36, 27 July 2010 (UTC)

Pure individualism or self-interest might result in Yellowstone being logged and/or developed...but part of the value of a government is in its ability to make decisions that won't screw over future generations. (However) From Human Action, von Mises:
Carried through consistently, the right of property would entitle the proprietor to claim all the advantages which the good’s employment may generate on the one hand and would burden him with all the disadvantages resulting from its employment on the other hand. Then the proprietor alone would be fully responsible for the outcome. In dealing with his property he would take into account all the expected results of his action, those considered favorable as well as those considered unfavorable. But if some of the consequences of his action are outside of the sphere of the benefits he is entitled to reap and of the drawbacks that are put to his debit, he will not bother in his planning about all the effects of his action. He will disregard those benefits which do not increase his own satisfaction and those costs which do not burden him. His conduct will deviate from the line which it would have followed if the laws were better adjusted to the economic objectives of private ownership. He will embark upon certain projects only because the laws release him from responsibility for some of the costs incurred. He will abstain from other projects merely because the laws prevent him from harvesting all the advantages derivable. ... 
The extreme instance is provided by the case of no-man’s property referred to above.[9] If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns—lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil—do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds. In the early days of human civilization, when soil of a quality not inferior to that of the utilized pieces was still abundant, people did not find any fault with such predatory methods. When their effects appeared in a decrease in the net returns, the ploughman abandoned his farm and moved to another place. It was only when a country was more densely settled and unoccupied first class land was no longer available for appropriation, that people began to consider such predatory methods wasteful. At that time they consolidated the institution of private property in land. They started with arable land and then, step by step, included pastures, forests, and fisheries. The newly settled colonial countries overseas, especially the vast spaces of the United States, whose marvelous agricultural potentialities were almost untouched when the first colonists from Europe arrived, passed through the same stages. Until the last decades of the nineteenth century there was always a geographic zone open to newcomers—the frontier. Neither the existence of the frontier nor its passing was peculiar to America. What characterizes American conditions is the fact that at the time the frontier disappeared ideological and institutional factors impeded the adjustment of the methods of land utilization to the change in the data. 
In the central and western areas of continental Europe, where the institution of private property and been rigidly established for many centuries, things were different. There was no question of soil erosion of formerly cultivated land. There was no problem of forest devastation in spite of the fact that the domestic forests had been for ages the only source of lumber for construction and mining and of fuel for heating and for the foundries and furnaces, the potteries and the glass factories. The owners of the forests were impelled to conservation by their own selfish interests. In the most densely inhabited and industrialized areas up to a few years ago between a fifth and a third of the surface was still covered by first-class forests managed according to the methods of scientific forestry. [10] 
Footnote [10]: Late in the eighteenth century European governments began to enact laws aiming at forest conservation. However, it would be a serious blunder to ascribe to these laws any role in the conservation of the forests. Before the middle of the nineteenth century there was no administrative apparatus available for their enforcement. Besides the governments of Austria and Prussia, to say nothing of those of the smaller German states, virtually lacked the power to enforce to such laws against the aristocratic lords. No civil servant before 1914 would have been bold enough to rouse the anger of a Bohemian or Silesian magnate or a German mediatized standesheer. These princes and counts were spontaneously committed to forest conservation because they felt perfectly safe in the possession of their property and were eager to preserve unabated the source of their revenues and the market price of their estates.
N6n (talk) 15:32, 27 July 2010 (UTC)


You seem to be confusing anarchy with lawlessness and violence. Common, but wrong.

ANY society - democratic, communist, fascist, anarchy, religious dicatorship, monarchy, feudal, dictatorship, whatever, has to have the vast majority of its citizens respect the rights of others. Tian has pointed out that the vast majority of us do not bomb federal buildings out of fear of beign caught - we refrain from doing so just because we recognize that killing others and destroying property is wrong and we don't do so. Fear of getting caught is a very minor secondary concern if we even consider it at all.

Any society - ANY SOCIETY - that loses this is gone. It can't survive. This includes a society with no government. Most likely there will be a period of chaos followed by a dictatorship. Something like this happened when the Nazis took over Weimar Germany.

If we went into a period of no government - aka anarchy - with the vast majority of citizens respecting the lives and property of others, it would work. Mechanisms would be developed to deal with the few who needed dealing with.

If we did not have this and a significant portion of the population killed, stole and destroyed just because they thought they could get away with it, anarchy would not work. Neither would any other system.
http://dwrighsr.tripod.com/heinlein/RatAnarch/Quotes_AFH.html N6n (talk) 07:09, 5 August 2010 (UTC)


*******************************

That was my first interaction with an ancap.  It was fairly substantial.  I remember thinking that if I genuinely wanted to defeat his arguments... then I had better do some homework.

I read quite a bit of Rothbard's work and certainly was not at all impressed with his moral "taxation is theft" argument.  However, in other parts there was more than a hint of the Invisible Hand.

It was only later on when I read these two papers that Rothbard had written...

Toward a Reconstruction of Utility and Welfare Economics
The Myth of Neutral Taxation

... that I really appreciated that he had correctly diagnosed the fundamental problem with government... the massive scarcity of individual (earner) valuation.  It's just a shame that most of his devout followers focus more on his moral arguments than on his economic arguments.

David Friedman is also an anarcho-capitalist.  He's great because all his arguments are entirely economic in nature.

See also: Concentrated Benefits and Dispersed Costs, House of Cards And Wikipedia


Tuesday, March 14, 2017

Pestering David Friedman

My comment on David Friedman's blog entry... A Scrap of Libertarian History

**************************************

Rothbard sure did commit a few errors. But he and Buchanan were some of the precious few people who truly appreciated that the fundamental problem with government is the massive scarcity of individual valuation. However, unlike Buchanan, for some reason Rothbard never publicly considered the possibility of taxpayers simply directly allocating their taxes. I know there were quite a few rather fruitless exchanges between Buchanan and Samuelson... but I haven't run across any exchanges between Buchanan and Rothbard. Did you have any exchanges with Buchanan?

Ayn Rand simply refused to examine the anarcho-capitalist position? Hah. Ain't that the worst!? I know of one awesome and prominent anarcho-capitalist, not going to mention any names (because it's a really short list), who simply refuses to allocate more than three sentences to the pragmatarian position! So I can certainly empathize. :D But to his immense credit, so far he's been super tolerant of my occasional pestering. :)

Have you seen this fundraising page on the LP website? There's a list of possible themes for the 2018 convention. Donors can "dollar vote" for their favorite themes. Now we can all see that the demand for "Taxation Is Theft" is relatively insignificant. Oh man, if only Rothbard was alive to see that! Last time I checked the most valuable theme is, "I'm That Libertarian". I had no idea what it meant. Given that it was the most valuable theme I decided to google for it. I found a Youtube video of some guy giving a pretty impassioned libertarian speech. It was a little awkward, as is usually the case with libertarians, but I gotta admit that it was somewhat inspiring.

What's super cool, and loads ironic, about the Libertarian Party's fundraising system... is that it's a pragmatarian system! Well... to give credit where it's due... it's Buchanan's system. Since donors are giving their money to the LP anyways, they have absolutely no incentive to conceal their true preference for the themes. Sure, the donations are voluntary rather than compulsory... so in this regard there is still the free-rider problem. Perhaps if all libertarians were required to make a minimum donation to their preferred theme, we'd super ironically discover that the "Taxation Is Theft" theme is far more relatively valuable. Nevertheless the LP's fundraiser quite nicely demonstrates the idea of using a payment to reveal/communicate the intensity of more specific preferences.

Last night I e-mailed Wes Benedict and asked if he was interested in being BFFs. In my e-mail I told him that it would be ultra awesome if he did the same thing with books! Which pro-market/freedom book is the most valuable?! Oh God I'd love to know! I'd love to be able to see the true value of things! Dear God in heaven please cure my blindness!!!

Oh, wow, Benedict seriously just replied to my e-mail. I'm honestly very pleasantly surprised that he did so! Hmmm... he didn't accept or reject my BFF offer. Seems like he's playing it safe. :)

Tuesday, March 7, 2017

BBQ Builderism

BBQ!  Builderism!  Where do better options come from?  Entrepreneurs!




Potatoes, eggplant, portobello mushroom and steak.  Close up of mushroom...




Yum!!!

Entrepreneurs aren't mind readers...




They gotta know how relatively rare and precious you perceive crabs to be.  This should be accurately communicated/revealed by your willingness to pay...





Wednesday, March 1, 2017

Evolution And Economics In A Nutshell

Reply to BLawson's comment...

***********************************

"Except by your logic all primates should have ended up in the same place."

Bats are mammals that are exceptionally good at flying.  Humans are mammals that are exceptionally good at walking upright.  Walking upright makes us exceptionally good at allocating resources.  Being exceptionally good at allocating resources puts an exceptional amount of selection pressure on intelligence.  Therefore, humans are exceptionally intelligent.

If all the humans left this planet and colonized mars... then it's a given that, in the absence of any sort of massive natural disaster, some other primate would evolve to become exceptionally good at walking upright.  As a result, they would also become exceptionally intelligent.

On Netflix I was watching some nature show and they were showing those wonderfully bizarre creatures that live near the underwater thermal vents.  The narrator said that at anytime the vents can simply cease to function.  When that happens it spells disaster for the creatures that depend on its existence.

This means that life is synonymous with colonization.  Flying sure facilitates colonization.  So does walking upright.  But walking upright and having arms and hands also facilitates the allocation of resources... which facilitates the development of the intelligence needed to colonize other planets.  Nature created us humans so that she wouldn't have all her eggs in the same basket (Earth).

Unfortunately, humans don't quite grasp that progress is a function of difference.  So we allow a small group of government planners to spend all our taxes for us.  This results in too many eggs in too few baskets... which hinders progress... which greatly increases the time it will take before we can successfully colonize other planets.  And the longer it takes to colonize other planets... the greater the chances that we'll be wiped out by some massive disaster.  

There you go... evolution and economics in a nutshell.