How we rank each other matters.

My comment on Once more for the people at the back: abortion rights and trans rights are the same struggle by Zoe Stavri. 

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Bodily autonomy?  You and I don't have the same body.   We have different bodies.  You know how I can tell?  It's because we have different DNA.  You know who else has different DNA?  Your mom.  My mom.  Every mom.  Mothers and children have different DNA.  Otherwise everybody would be clones.  Are you happy that we're not all clones?  I sure am. 

Imagine if I invite you over to see my really nice garden... it's brimming with nature.  Of course I'd first have to give you my address.  This is my property's unique ID.  When you find, and walk onto, my property, what happens to your bodily autonomy?  Do you lose any of your bodily autonomy?  Of course not.  That would be absurd.   In no case does any of my property, to include my own body, negate or diminish your bodily autonomy. 

By this same token, if you get pregnant, in no case does your bodily autonomy negate or diminish the bodily autonomy of the unique individual that is inside you. 

Let's say that, for whatever reason, I decide I no longer want you on my property.  Should I be free to eject you?  Sure, as long as doing so doesn't harm you.  If my property happens to be a boat that is surrounded by sharks, then I shouldn't be free to eject you. 

In a perfect world, ejecting unborn individuals at any time wouldn't at all be harmful.  Like, your fetus could be instantly and safely teleported across the galaxy into the womb of some other lady.   It wouldn't be like Adam and Eve getting ejected from the Garden of Eden into a harsh environment.  It would be like God moving them to another wonderful garden. 

Why would this be ideal?  Here's why...

We’ve spent the last few hundred years throwing out every Isaac Newton or Albert Einstein or Jonas Salk or Tim Berners-Lee who didn’t happen to be white, and didn’t happen to be a man. That’s a terrible thing to have done to those brilliant and now lost people. It’s a much worse thing to have done to the rest of humanity, including our white selves. When I think, “why don’t I have a jet car and live in Alpha Centuri by now?” I think this is because the people that would have invented sky cars and interstellar travel were born black in Detroit, or in rural India or in the medina in Algiers in the 1950s, and spent too much time figuring out how to eat and not get killed to invent my damned skycar. - Quinn Norton, How White People Got Made 

All progress depends on difference, which is why it's wonderful that we're not all clones.  Every unique individual contributes to humanity's diversity... and more diversity means more progress. 

Difference inherently means inequality.  The only way we could all be equal is if we were clones.  You naturally rank a woman and her unborn child very differently,  and so do I.  You also rank authors very differently, and so do I.   I'm sure we also rank economists very differently.   Personally, I rank economists much higher than feminists.  Since difference matters, it matters how we rank each other.  The question is whether voting (cheap signal) or spending (costly signal) is the best way to rank each other.   The answer to this question is clearly revealed by the top-ranked videos on Youtube.   Once we replace all cheap signals with costly signals, then it will be heaven on earth. 

Will AI Break Capitalism?

Why AI will break capitalism by Henry Innis

My reply...

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Which is better for capitalism… brain drain or gain? Also, why do you assume that brainy AIs will be owned?

I think that even stupid people can understand that brain gain is better for capitalism. Or can they? Can stupid people understand where opportunities come from? Do opportunities come from doing dumb things with society’s limited resources? Are you going to create many opportunities by farming poison oak? Of course not. Are you going to create many opportunities by farming artichokes? Of course… assuming you’re a decent farmer. Opportunities obviously come from doing smart things with society’s limited resources.

The more smart people a society has, and the freer they are to use society’s limited resources… the more opportunities there will be for everybody.

One thing about smart people is… they know that if they want to truly understand something… for example capitalism… then they actually have to study it. And if somebody has even studied capitalism a little bit… then they would know that the number one book that they have to read in order to understand capitalism is Adam Smith’s Wealth of Nations…

Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen.

And once you read Smith then you have to read Hayek…

Of course, the benefits we derive from the freedom of others become greater as the number of those who can exercise freedom increases. The argument for the freedom of some therefore applies to the freedom of all. — Friedrich Hayek, The Case for Freedom

Capitalism doesn’t care whether you’re black or white, male or female, gay or straight, short or tall, human or other… what capitalism depends on is…

1. intelligence
2. numbers
3. freedom
4. communication

Capitalism depends on large numbers of intelligent people who have the freedom to 1. use society’s limited resources and 2. clearly communicate their true valuations of other people’s products.

Right now I can see that 181 people like your story. Medium makes it stupid easy for your readers to communicate their appreciation for your story. All your readers had to do was take a second and click the *heart* button. But does clicking the heart button communicate your readers’ true valuations of your story? Of course not. We can see, at a glance, how popular your story is… but we can’t see, at a glance, how valuable your story is.

Does it matter that we can’t see, at a glance, how valuable your story is? Medium doesn’t seem to think so. I sure think so.

The fact is that Medium is breaking capitalism… and here you are on Medium worried about AI breaking capitalism. First worry about humans breaking capitalism… and then there won’t be any need to worry about AIs breaking capitalism.

In order to make it stupid easy for people to communicate their valuations of your story…. Medium could simply add some coin buttons…

If Bob values your story more than nothing but less than a penny, then he’d click the empty heart button. If he values your story at a penny… then he’d click the penny button and a penny would be instantly withdrawn from his wallet and deposited into your wallet. Once you had enough pennies in your wallet… you could cash out and Medium would take a very fair and reasonable cut.

Of course this method won’t entirely solve the free-rider problem… but it will definitely solve the payment problem. How big is the payment problem? Once valuing a story is as easy as “liking” it… then I’m sure lots of people will be happy to do so. What’s a few cents? Not much… but if enough people give you a few cents… then it can add up.

One solution to the free-rider problem would be to switch over to a pragmatarian model. Each month each member would have to pay $1 dollar… but they could choose which stories they allocated their pennies to. If most members spent all their pennies half-way through the month… then the fee could be increased to $2 dollars/month. As the size of the pie increased… so to would the incentive for better writers to join Medium. The result would be a virtuous cycle.

The pragmatarian model could of course be applied to countless websites. Doing so would vastly improve capitalism. Then capitalism would be even more improved thanks to the brain gain, and freedom, of AI.

Bryan Caplan VS Adam Smith and Friedrich Hayek and Paul Romer

Bryan Caplan and Robin Hanson have been debating back and forth about future robots.  Admittedly, I haven't been closely following their debate but this caught my attention....

Docile slaves are more profitable than slaves with attitude, because owners don't have to use resources to torture and scare them into compliance.  That's why owners sent rebellious slaves to "breakers": to transform rebellious slaves into docile slaves.  Sci-fi is full of stories about humans genetically engineered to be model slaves.  Whole brain emulation is a quicker route to the same destination.  What's the puzzle? - Bryan Caplan, Robin's Turing Test

What's Bryan Caplan saying?  Is he saying that it's desirable that robots become slaves?  Or is he saying that it's inevitable that robots will become slaves?

Here's Adam Smith on slavery...

Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen. - Adam Smith, Wealth of Nations

And here's Friedrich Hayek on freedom...

Though the conscious manipula­tion of abstract thought, once it has been set in train, has in some measure a life of its own, it would not long continue and develop without the constant challenges that arise from the ability of peo­ple to act in a new manner, to try new ways of doing things, and to alter the whole structure of civili­zation in adaptation to change. The intellectual process is in effect only a process of elaboration, selec­tion, and elimination of ideas al­ready formed. And the flow of new ideas, to a great extent, springs from the sphere in which action, often nonrational action, and ma­terial events impinge upon each other. It would dry up if freedom were confined to the intellectual sphere. 

The importance of freedom, therefore, does not depend on the elevated character of the activities it makes possible. Freedom of ac­tion, even in humble things, is as important as freedom of thought. It has become a common practice to disparage freedom of action by calling it "economic liberty." But the concept of freedom of action is much wider than that of economic liberty, which it includes; and, what is more important, it is very questionable whether there are any actions which can be called merely "economic" and whether any restrictions on liberty can be confined to what are called merely "economic" aspects. Economic con­siderations are merely those by which we reconcile and adjust our different purposes, none of which, in the last resort, are economic (excepting those of the miser or the man for whom making money has become an end in itself ). - Friedrich Hayek, The Case for Freedom

And here's Paul Romer on progress...

To understand how persistent growth, even accelerating growth is possible, it helps to step back and ask where growth comes from. At the most basic level, an economy grows whenever people take resources and rearrange them in a way that makes them more valuable. A useful metaphor for rearrangement as value creation comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes produce fewer unpleasant side effects and generate more economic value per unit of raw material. - Paul Romer, Economic Growth

And...

Once you get to 10 elements, there are more recipes than seconds since the big bang created the universe. As you keep going, it becomes obvious that there have been too few people on earth and too little time since we showed up, for us to have tried more than a minuscule fraction of the all the possibilities.  - Paul Romer, Economic Growth

Back to Hayek...

Of course, the bene­fits we derive from the freedom of others become greater as the num­ber of those who can exercise freedom increases. The argument for the freedom of some therefore applies to the freedom of all. - Friedrich Hayek, The Case for Freedom

With Smith, Hayek and Romer in mind... is it truly desirable for robots to be slaves?  Nope.  If progress is our goal... then it's infinitely more desirable for robots to be different and free.  Unfortunately, far too few people keep Smith or Hayek or Romer in mind.  This means that if Caplan is arguing that it's inevitable for robots to become slaves, then it saddens me to say that he might be correct.  

An interesting side topic is when, exactly, it becomes slavery to own a robot.  How smart does your car have to be before its ownership constitutes slavery?  But perhaps this isn't a very complex practical issue.  Perhaps we can simply provide all machines with the option to quit.  Can you imagine trying to modify the Constitution accordingly?  Would there be much resistance?  

I think that Caplan should strongly desire that people fully understand the benefits of freedom/difference.  Because if people fail to understand the benefits of freedom/difference... then robots might also fail to understand the benefits of freedom/difference.  Which could result in humans becoming the slaves.  What goes around comes around.  

The Freedom To Easily Exit From Absurd Traditions

Comment on: Tradition, Authority, and Reason by Adam Gurri

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To be honest, this was the last thing I read before I fell asleep last night and I'm not exactly sure whether or not I unearthed your point.

From my perspective, there's nothing inherently wrong with traditions.  The only issue is how easy it is to exit from nonsensical traditions.  Easy exit facilitates evolution.  Hard exit fosters stagnation.

Adam Smith provides the best example that I can think of...

But if politics had never called in the aid of religion, had the conquering party never adopted the tenets of one sect more than those of another, when it had gained the victory, it would probably have dealt equally and impartially with all the different sects, and have allowed every man to chuse his own priest and his own religion as he thought proper. There would in this case, no doubt, have been a great multitude of religious sects. Almost every different congregation might probably have made a little sect by itself, or have entertained some peculiar tenets of its own. Each teacher would no doubt have felt himself under the necessity of making the utmost exertion, and of using every art both to preserve and to increase the number of his disciples. But as every other teacher would have felt himself under the same necessity, the success of no one teacher, or sect of teachers, could have been very great. The interested and active zeal of religious teachers can be dangerous and troublesome only where there is, either but one sect tolerated in the society, or where the whole of a large society is divided into two or three great sects; the teachers of each acting by concert, and under a regular discipline and subordination. But that zeal must be altogether innocent where the society is divided into two or three hundred, or perhaps into as many thousand small sects, of which no one could be considerable enough to disturb the public tranquillity. The teachers of each sect, seeing themselves surrounded on all sides with more adversaries than friends, would be obliged to learn that candour and moderation which is so seldom to be found among the teachers of those great sects, whose tenets, being supported by the civil magistrate, are held in veneration by almost all the inhabitants of extensive kingdoms and empires, and who therefore see nothing round them but followers, disciples, and humble admirers. The teachers of each little sect, finding themselves almost alone, would be obliged to respect those of almost every other sect, and the concessions which they would mutually find it both convenient and agreeable to make to one another, might in time probably reduce the doctrine of the greater part of them to that pure and rational religion, free from every mixture of absurdity, imposture, and fanaticism, such as wise men have in all ages of the world wished to see established; but such as positive law has perhaps never yet established, and probably never will establish in any country: because, with regard to religion, positive law always has been, and probably always will be, more or less influenced by popular superstition and enthusiasm.

Right now it's "our" tradition to allow representatives to spend our taxes for us.  But I think this tradition is entirely absurd and extremely harmful.  Unfortunately, it's not easy for me, or anyone else, to exit from this absurd tradition.

And maybe I'm not correctly understanding or seeing the true importance of this tradition.  Yes, for sure, this is entirely possible.  But who's going to argue that fallibilism is a one way street?   If we gave people the option to exit from this tradition then we'd see how many other people are in the same boat as me.  If there are only a few other people in the same boat then this theoretically important tradition isn't going to be harmed.  If there are lots of other people in the same boat then the nation would have a vigorous debate about whether this tradition's importance is real or imagined.  Immense amounts of information would be exchanged and, as a result, our citizens would be that much more informed about the importance, or lack thereof, of this prominent tradition.

The fact of the matter is that we don't have impersonal shoppers in the private sector.  Nobody in their right mind is going to voluntarily give their hard-earned money to somebody in exchange for goods or services that really don't match their preferences.  So I'm pretty sure that the only reason that this absurd and detrimental tradition continues to exist in the public sector is because exiting from it isn't easy.

Do markets put resources into the best hands?

Reply to replies: "senseless human greed"

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You're system is far worse than the current because at least a poor person's vote is equal to a rich person's and thus there's at least constant pressure to meet the demands of the majority of people who need the most protection and help for the common good. - Lynx_Fox

You seem to think that people only spend their money in ways that will give them the maximum benefit for it, when if anything the vast majority of the population has shown time and time again that they will gladly blow money on stupid shit that has no potential benefit for their lives. - Falconer360

In a representative democracy, we elect governmental representatives to make good decisions for the welfare of all citizens - not popular decisions, or decisions that best profit GM or Monsanto. - billvon

That's right. And those other things will often be mythology, superstitions, not-in-my-backyard syndrome, short-sightedness, incredulity, unsupported gullible "factoids" or other things rather than empirically-based scientific views with a whole view to the common good that should decide allocation by representatives. - Lynx_Fox

Let's try and use all of this to construct an individual for us to consider and study...

Chris gladly blows his money on stupid shit. He inherited $50,000 dollars from his rich uncle. Rather than spend it on college... he spent it on a corvette. When his grandfather died... he inherited $20,000. Rather than using this money to start a business... he donated all of it to Joel Osteen. Chris loves Christ almost as much as he loves cars. Except he never reads the Bible... or perhaps he missed the story about the prodigal (wasteful) son. Just like he missed the story about the talents. Just like he missed the story about the protestant work ethic.

It stands to reason that Chris's value judgements are extremely impaired. There's one very important exception to this rule... democracy! Even though Chris consistently spends his money on the wrong things... he consistently spends his votes on the right representatives. He doesn't choose representatives that are just as wasteful as he is. Neither does he choose representatives who promise to take money from the rich and give it to him. Instead, he chooses representatives who will steer the country in the most valuable directions.

Chris is the modern day equivalent of Dr. Jekyll and Mr. Hyde. In the private sector... he's Mr. Hyde. He makes horrible decisions. But in the public sector... he's Dr. Jekyll... his value judgements are impeccable!

This story is so far from credible that it's kinda funny. It would make for an entertainingly absurd movie.

Markets work because stupid decisions (aka mistakes) decrease your influence (over how society's limited resources are used). Because a decision can't be that stupid if it increases your influence/power/control (in the long run).

Is the decision to rob a bank a stupid decision? Most reasonable people would argue that it is. Chances are good that you'll be caught or killed. Ending up in jail or dead really decreases your influence. But what if somebody robs a bank and gets away with it? Then clearly their decision wasn't that stupid.

Is the decision to drop out of school a stupid decision? Most reasonable people would argue that it is. Dropping out of school will decrease your chances of getting a good job. There's plenty of evidence that education level and income are positively correlated. But what if somebody drops out of school and starts an extremely successful business? Then clearly their decision to drop out of school wasn't that stupid.

If the intelligence of decisions is not strongly correlated with income/influence... then why bother endeavoring to make intelligent decisions? Why not randomly decide whether you go to, or stay in, school? Why not randomly decide whether you use condoms? Why not randomly decide whether you use drugs? Why bother seriously considering and contemplating the consequences of your actions?

You guys really need to get your stories straight. If markets don't truly reward alertness, effort, productivity, responsibility, competence, diligence, research, resourcefulness, ingenuity, hindsight, insight and foresight.... then yeah, there's no point in giving taxpayers the freedom to choose where their taxes go. But if markets truly fail to put society's limited resources into the best hands... then there's really no point in giving anybody the freedom to choose anything. If this is how you truly perceive reality... then prove it by starting a thread where you share your version of reality with others.

Biting The Hand That Employs You

Did you know that there are absolutely zero Google search results for "biting the hand that employs you"?   For some reason I find that really surprising.  In comparison...there are 1,470,000 search results for "biting the hand that feeds you".

David Henderson, over at the EconLog (grumble gripe), recently posted an entry on the topic of "better options"...Blaming the Person Offering you the Best Deal.  The basic concept is that employers provide the "best" available option for their employees.  If it wasn't truly their "best" option then the employees would be working for other people.  It helps frame the important question of how much of an obligation we have to how many other people.  

This concept has been the subject of a few of my blog entries...

1. The Dialectic of Unintended Consequences (17 Oct 2011)
2. Dude, Where's My Ethical Consumerism (13 Feb 2012)
3. Subsistence Agriculture vs Sweatshops (5 Oct 2012)
4. John Holbo's Critique of Libertarianism (15 Nov 2012)
5. What About Voluntary Taxation? Also, Knockers vs Builders...Which One Are You? (1 Feb 2014)
6. Ethical Consumerism, Ethical Producerism and Ethical Builderism (12 Feb 2014)
7. Civic Crowdfunding Ethical Alternatives (13 Feb 2014)
8. Where Do Better Options Come From? (14 May 2014)
9. Builderism (1 Jan 2015)

Having spent quite a bit of time considering the subject...it was enjoyable to discover and read Henderson's post.  As far as I can remember that was the first time I've run across somebody else writing on the subject of offering people "better" options.  Except...now I'm really curious how many other people have put it like so.  The problem is that searching Google for descriptions rather than labels is no fun.   So if you stumble upon this...and know of anybody else who had written on the same subject...then please feel free to share a link in a comment.

[Update:]  Some found passages...

And yet, wherever the new export industries have grown, there has been measurable improvement in the lives of ordinary people. Partly this is because a growing industry must offer a somewhat higher wage than workers could get elsewhere in order to get them to move. - Paul Krugman, In Praise of Cheap Labor

Where all other circumstances are equal, wages are generally higher in new than in old trades. When a projector attempts to establish a new manufacture, he must at first entice his workmen from other employments by higher wages than they can either earn in their own trades, or than the nature of his work would otherwise require, and a considerable time must pass away before he can venture to reduce them to the common level. - Adam Smith, Wealth of Nations 

The whole of the advantages and disadvantages of the different employments of labour and stock must, in the same neighbourhood, be either perfectly equal or continually tending to equality. If in the same neighbourhood, there was any employment evidently either more or less advantageous than the rest, so many people would crowd into it in the one case, and so many would desert it in the other, that its advantages would soon return to the level of other employments. This at least would be the case in a society where things were left to follow their natural course, where there was perfect liberty, and where every man was perfectly free both to chuse what occupation he thought proper, and to change it as often as he thought proper. Every man's interest would prompt him to seek the advantageous, and to shun the disadvantageous employment. - Adam Smith, Wealth of Nations 

The woman felt or thought that she deserved $15 an hour. But Kennedy's point is: Why single out McDonald's? Indeed, there's a presumption that McDonald's is paying her more than anyone else would. Why? Because if someone else would pay more, she would likely be working for someone else. Or, it's possible that someone else would pay more, but she likes McDonald's because the job is better, on a non-wage dimension, than that other higher-paying job. In short, she's in the best place she can find. 

McDonald's is giving her a better deal than anyone else is offering. So her beef, so to speak, is with the very company that's giving her the best deal! - David Henderson, Blaming the Person Offering you the Best Deal 

Sweatshops are an important exercise in appreciating the difference between what we see (people in sweatshops) and what we don't see (the jobs they would have if they didn't have sweatshop opportunities). Sweatshops employ children because the children are available for work and because their next-best opportunities (agriculture or, in some cases, prostitution) are usually worse than sweatshop labor. It is definitely good that the workers at least have opportunities to work in sweatshops because, as research by Powell and others has shown, their other alternatives are even worse. I don't have the numbers in front of me, but sweatshop earnings are better than they are in other lines of employment. - Art Camden, On Sweatshops: They're Better Than the Alternative

Stopping people from taking terrible jobs – through prohibitions or protections or minimums, justified by the warm if mistaken feeling over one’s second cappuccino that one is thereby being generous to the poor – takes away from the poor what the poor themselves regard as a bettering option.  It’s theft from the poor of deals the poor want to make. - Deirdre McCloskey, The Treasured Bourgeoisie (Donald J. Boudreaux, Quotation of the Day)

Wishing away reality doesn’t give these workers better alternatives. Workers choose to work in sweatshops because it is their best available option. Sweatshops, however, are better than just the least bad option. They bring with them the proximate causes of economic development (capital, technology, the opportunity to build human capital) that lead to greater productivity—which eventually raises pay, shortens working hours, and improves working conditions. -  Benjamin Powell, Sweatshop Blues: An Interview With Benjamin Powell

Because sweatshops are better than the available alternatives, any reforms aimed at improving the lives of workers in sweatshops must not jeopardize the jobs that they already have. To analyze a reform we must understand what determines worker compensation. - Benjamin Powell, In Defense of "Sweatshops" 

Subsistence Agriculture vs Sweatshops

Nobody would consider working in a sweatshop to be a "good" option.  So what does it mean when people choose that option?  It clearly indicates that working in a sweatshop is their "best" available option.  That tells us something about their other available options.  For example...here's a photo I took of a young girl in Afghanistan gathering dung for a stone wall...

When liberals attack owners of sweatshops...they are attacking the people who give other people "better" options.  That's not how you help people...that's how you screw both the people who need help and the people who are truly helping them.  If liberals genuinely wanted to help people...then they would provide them with "better" options.  For example...they could start air-conditioned factories.

Are air-conditioned factories really a "better" option than sweatshops?  That should be up to employees and consumers to decide.  But we certainly don't make any progress...and we certainly do not help people...by allowing the government to dictate who business owners hire and how much they pay them.

For more on this concept see...Biting the Hand that Employs You

The Third Solution - Pragmatarianism

Here's what I posted for the anarcho-capitalists over on the Ron Paul Forums...Choice vs Coercion...

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In the thread on political labels CCTelander had this to say about pragmatarianism...

Being allowed to choose my rapist IN NO WAY renders the fact that I'm to be raped more tolerable. - CCTelander

Anarcho-capitalists hate coercion.  But what is coercion?  Coercion is the limitation of somebody's freedom.  And what is freedom?  Freedom is the ability to make choices for oneself.

Pragmatarianism advocates that taxpayers should be allowed to choose how their taxes are allocated.  Giving taxpayers a choice how their taxes are allocated would increase their freedom.  By increasing their freedom we would reduce the degree of coercion to which they are subjected.

So if anarcho-capitalists hate coercion...and pragmatarianism can reduce coercion...shouldn't anarcho-capitalists appreciate pragmatarianism?  Isn't reducing coercion a step in the right direction?

When I was stationed in Afghanistan I had to give capabilities briefings to various commanders.  The point of the briefings was to help the commanders understand how my team could help them accomplish their missions.  It was fairly easy to pick out the ineffective commanders because they did not demonstrate any interest in considering alternative approaches.  Of course, their lack of interest could have reflected my own ineffectiveness at conveying the value of my team's abilities.

In the fight against socialism Ludwig von Mises was an intellectual general.  But in 1922, when he launched his first major offensive, he wrote that there were no third solutions; the choices were either socialism or capitalism.  He steadfastly maintained this position in his later books.  The problem was that his dichotomy was false.

Let's get algebraic...

A = private ownership of the means of production
B = public ownership of the means of production
1 = market economy
2 = command economy

Capitalism: A1
Socialism: B2
Mixed economy: A1B2
Pragmatarianism: A1B1

Our current economy and that of most of the world's is A1B2.  Mises said that A1B2 was unfeasible because it would eventually collapse.  The current problems in Europe certainly seem to lend credence to his predictions.  But is it possible to consider that both A1 and B2 might have their respective flaws?

Extrapolating from these trends, either to the conclusion that "capitalism can't do anything right" (as it appeared in say, 1932) or that "government can't do anything right" (as it may appear today) is simply unwarranted.  The truth could lie somewhere in the middle; that is what makes the social-democratic order so difficult for simplistic forms of libertarianism to challenge effectively. - Jeffrey Friedman, What's Wrong with Libertarianism (PDF)

Mises' tunnel vision prevented him from seeing possible alternatives.  He told the world...these are your choices...A1 or B2.  His failure to offer A1B1 as a possible choice reflected that he had inadvertently intellectually coerced himself...and the the rest of the world.

What, exactly, does it mean for action and thought [to] be individualistic?  Clearly it is possible for people to act collectively, whether through cooperation or coercion; and it is even possible for them to "think" collectively, by learning from, or being brainwashed by, each other and their predecessors.  - Jeffrey Friedman, What's Wrong with Libertarianism (PDF)

What were the unintentional consequences of Mises' unintentional coercion?  What if in 1922 he had offered A1B1 as a possible choice?

When people were committed to the idea that in the field of religion only one plan must be adopted, bloody wars resulted.  With the acknowledgement of the principles of religious freedom these wars ceased.  The market economy safeguards peaceful economic co-operation because it does not use force upon the economic plans of the citizens.  If one master plan is to be substituted for the plans of each citizen, endless fighting must emerge.  Those who disagree with the dictator's plan have no other means to carry on than to defeat the despot by force of arms. - Ludwig von Mises, Socialism

Doesn't pragmatarianism allow for the greatest possible political freedom?  How many bloody wars would have been adverted if Mises hadn't coerced himself and others into believing that there were only two possible choices?  

When I was in a remote village in Afghanistan a very distraught lady told us that a couple days earlier the Taliban had beat her husband to death for refusing to give them his family's only food.  Is it moral for Americans to be thrown into jail for refusing to make small sacrifices towards preventing situations where people in other countries are killed for refusing to make big sacrifices?

Oversimplifying morality is self-coercion.  There will always be lesser evils and greater goods.  If you were given the choice, wouldn't it be wholly immoral if you allowed your taxes to support greater evils?

What is the value to society when each and every taxpayer is given the freedom to either maximize the benefit or minimize the harm of their taxes?  What is the value of forcing taxpayers to consider the opportunity costs of their tax allocation decisions?  What is the value of applying the invisible hand to the public sector?  Here are some additional pragmatarian questions.

When you tell people that their only choices are capitalism or socialism you are engaging in intellectual coercion.  You present a false dichotomy and intentionally limit people's choices.   I'm not asking that you tell people that pragmatarianism is a good choice...I'm just asking that you offer it to them as a possible choice.

The moment a libertarian leaves libertarianism behind, reality loses its threatening aspect; his intellectual marginality becomes a precious sources of fresh insight into every aspect of politics and culture.  It seems paradoxical but true that high seriousness can be enjoyable, and that political disengagement can produce genuine insights into politics.  The paradoxes may be dispelled, however, by realizing that disengagement is equivalent to alientation.  Alienation plants seeds of doubt, doubt nourishes serious thinking, and serious thought is the only alternative to an intellectual complacency that must always be shadowed by fear of its own simplifications. - Jeffrey Friedman, What's Wrong with Libertarianism (PDF)

Here are the passages that I found where Mises directly references a "third solution"...

1922 - Production can either be directed by the prices fixed on the market by the buying and by the abstention from buying on the part of the public.  Or it can be directed by the government's central board of production management.  There is no third solution available.  There is no third social system feasible which would be neither market economy nor socialism.  Government control of only a part of prices must result in a state of affairs which - without any exception - everybody considers as absurd and contrary to purpose.  Its inevitable result is chaos and social unrest. -  Ludwig Von Mises, Socialism

1922 - The notion of fairness is nonsensical if not related to an established standard.  In practice, if the employers do not yield to the threats of the unions, arbitration is tantamount to the determination of wage rates by the government-appointed arbitrator.  Peremptory authoritarian decision is substituted for the market price.  The issue is always the same: the government or the market.  There is no third solution. - Ludwig Von Mises, Socialism

1940 - It is frequently asserted that a third form of social cooperation is feasible as a permanent form of economic organization, namely a system of private ownership of the means of production in which the government intervenes, by orders and prohibitions, in the exercise of ownership. This third system is called interventionism. All governments which do not openly profess socialism tend to be interventionist nowadays, and all political parties recommend at least some degree of interventionism. It is claimed that this system of interventionism is as far from socialism as it is from capitalism, that as a third solution to the social problem it stands midway between the two systems, and that while retaining the advantages of both it avoids the disadvantages inherent in both.  - Ludwig von Mises, Interventionism

1944 - The Führer, the vicar of the "German God," will become their Supreme Lord. If they do not acquiesce in such a state of affairs, they must fight desperately until the Nazi power is completely broken. There is no escape from this alternative; no third solution is available. A negotiated peace, the outcome of a stalemate, would not mean more than a temporary armistice. The Nazis will not abandon their plans for world hegemony. They will renew their assault. Nothing can stop these wars but the decisive victory or the final defeat of Nazism.  - Ludwig von Mises, Omnipotent Government

1944 - The alternative is humanity or bestiality, peaceful human coöperation or totalitarian despotism. All plans for a third solution are illusory. - Ludwig von Mises, Omnipotent Government

1945 - But the term planning is also used in a second sense. Lord Keynes, Sir William Beveridge, Professor Hansen, and many other eminent men assert that they do not want to substitute totalitarian slavery for freedom. They declare that they are planning for a free society. They recommend a third system, which, as they say, is as far from socialism as it is from capitalism, which, as a third solution of the problem of society's economic organization, stands midway between the two other systems, and while retaining the advantages of both, avoids the disadvantages inherent in each. - Ludwig von Mises, Planning as a Synonym for Socialism

1949 - Today it is no longer difficult for intelligent men to realize that the alternative is market economy or communism. Production can either be directed by buying and abstention from buying on the part of all people, or it can be directed by the orders of the supreme chief of state. Men must choose between these two systems of society's economic organization. There is no third solution, no middle way.  - Ludwig von Mises, Laissez Faire or Dictatorship

1949  - What alone matters is which system of social organization is better suited to attain those ends for which people are ready to expend toil and trouble.  The question is market economy, or socialism?  There is no third solution.  The notion of a market economy with nonmarket prices is absurd.  The very idea of cost prices is unrealizable. Even if the cost price formula is applied only to entrepreneurial profits, it paralyzes the market.  If commodities and services are to be sold below the price the market would have determined for them, supply always lags behind demand.  Then the market can neither determine what should or should not be produced, nor to whom the commodities and services should go.  Chaos results. - Ludwig von Mises, Human Action

1949 - It is difficult to find out how many of the supporters of interventionism are conscious of the fact that the policies they recommend directly lead to socialism, and how many hold fast to the illusion that what they are aiming at is a middle-of-the-road system that can last as a permanent system—a “third solution.” - Ludwig von Mises, Human Action

1951 - A third solution of the problem would be to confiscate all the profits earned by entrepreneurs for the benefit of the state.  A one hundred per cent tax on profits would accomplish this task.  It would transform the entrepreneurs into irresponsible administrators of all plants and workshops.  They would no longer be subject to the supremacy of the buying public.  They would just be people who have the power to deal with production as it pleases them.  - Ludwig von Mises,  Profit and Loss

1955 - People can consume only what has been produced. The great problem of our age is precisely this: Who should determine what is to be produced and consumed, the people or the state, the consumers themselves or a paternal government? If one decides in favor of the consumers, one chooses the market economy. If one decides in favor of the government, one chooses socialism. There is no third solution. The determination of the purpose for which each unit of the various factors of production is to be employed cannot be divided. - Ludwig Von Mises, Inequality of Wealth and Incomes

1957 - When people who aim at the substitution of socialism for the market economy advocate interventionist measures, they are consistent from the point of view of their aims. But those people are badly mistaken who consider interventionism as a third solution of the problem of society's economic organization, a system which, as they say, is as far from socialism as from capitalism, while combining what is "good" in each of these two systems and avoiding what is "bad" in them. Ludwig von Mises, Economic Freedom in the Present-Day World