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Showing posts with label anarcho-capitalism. Show all posts
Showing posts with label anarcho-capitalism. Show all posts

Thursday, July 27, 2017

The Relationship Between Importance And Validity

Here's my reply to Adam Gurri's comment on my previous entry.

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Thanks for taking the time to read the entry and comment on it.

For me the originality (or lack thereof) of Rothbard's work isn't the main issue.  The impression that you gave was that all of his work was merely "rights" arguments.  I wanted to help you appreciate that this is really not the case.  

From my perspective, the value of Rothbard's results arguments is that he correctly diagnosed the fundamental problem with government.  He understood and argued that the government is no more capable of getting the supply of defense right than it is capable of getting the supply of food right.  The same really can't be said for any minimal government libertarian (ie Milton Friedman, Hayek, Mises).

For Rothbard the "therefore" was anarcho-capitalism. I disagree with his remedy but agree with his diagnosis.  From my perspective, Buchanan's "therefore" was much better: taxpayers are given the option to earmark their taxes.  The supply of defense would more accurately reflect the true demand for defense.

You don't believe that the supply of defense should be determined by demand.  Instead, you believe that it should be determined by "defending the best *reasons* for and against doing so".  You make it sound like the debate over defense and the demand for defense are mutually exclusive. But they really aren't.

We can imagine that Samantha is a hard-core vegetarian.  Everyone else in her family loves to eat meat.  Quite frequently they have fierce debates over vegetarianism.  When they do so they exchange copious amounts of information on the topic.  For example, Samantha endeavors to introduce them to progressively better meat substitutes.  The copious amounts of information exchanged among the members results in both sides being far more informed on the topic.  At the end of the day it's still entirely up to each family member to decide for themselves how much meat to purchase.  The spending decisions are made by, rather than for, the family members.

The same thing would occur if...

1. Unlike her family, Samantha was a hard-core pacifist
2. People could earmark their tax dollars

The defense spending decisions would be made by them.  Right now the defense spending decisions are made for them.

The passages that I shared by Rothbard, Buchanan and Ostrom all made the case, more or less, that people should make their own defense spending decisions.  These thinkers were all against, more or less, defense spending decisions being made for the people.

Unlike these thinkers, you haven't made your position on the issue exactly clear.  It's not like there's a lot of options.  Spending decisions are either made by the people, or for the people.

"do you *really* think the validity of an argument is dependent upon how much other people are willing to pay to read it?"

Lots of people were willing to pay to read Thomas Piketty's book. Does this make the arguments in his book more valid/correct/true?  No.  It makes them more important (worthy of attention).  But it's necessary to appreciate that not everybody who purchased his book agreed with his arguments.  The same can certainly be said for MacLean's book.

So let's remove the "purchase" aspect.  People simply and solely use their money to help determine and reveal the importance of Piketty's book.  Well... it doesn't work so well when there's only one book involved.  Let's include the Wealth of Nations.  People can decide how they divide their dollars between the two books.  They aren't buying the two books, they are grading/judging the relevance/importance of the books with their own money.  How would you divide your dollars between the two books?  Does it matter?  Would it be equally or more effective if you could just vote for one of the books instead?

Let's consider the issue of voting by looking at another example.   I regularly go to plant shows.  They are usually judged by a small group of experts.  I strongly disagree with this system. It would be far better if everyone could divide their donations among all the entries.

Let's say that plant shows and dog shows were both judged using my preferred system.  Would I spend more money at plant shows or at dog shows?  I wouldn't even attend the dog shows.  So I wouldn't spend any money at them.  This is because I'm far more informed about plants.  How I divided my dollars between dog shows and plant shows would reflect how my information was divided between dogs and plants.

What if Samantha manages to rope me into going to a dog show?  Like I said, I certainly wouldn't spend any of my money to judge the dogs.  But would I vote for the best dog?  Sure.  Why not?  It wouldn't cost me anything to do so.  Most of the people at the show would be in the same boat as me.  The majority is always less informed than the minority on every conceivable topic.  So with voting/surveys it's tyranny of the ignorant.  With spending it's tyranny of the informed. With traditional judging it's tyranny of a small handful of experts without any skin in the game.

A while back I started a small informal plant society.  In September we're planning to have a small show at a member's home.  Each participant will bring one of their favorite plants.  Then we'll each use our dollars to judge the relevance/importance of each other's plants.  The money that everybody earmarks to their favorite plants will be used to promote a webpage that displays the entries sorted by their importance (as determined by spending).

If Samantha ropes you into attending this show, how much money would you spend on your favorite plants?  I'm guessing that you wouldn't spend much, which would reflect your low level of plant information/interest.  And because you wouldn't spend much, your low level of plant information wouldn't have much influence on the results/rankings.  But let’s pretend that you’re super rich.  Then, despite having low information, you could easily exert considerable influence on the results/rankings.  This is why smaller markets are always worse judges of importance than larger markets.

Is my thinking original?  That's not the right question.  The right question is... am I barking up the right tree?  Rothbard barked up a few different trees.  Some trees were really wrong ("rights" arguments, anarcho-capitalism)... but one tree was really right (the fundamental problem with government). I have to recognize and commend him for barking up a very right tree.  Of course it's possible that I'm wrong about the rightness of the tree.  But it's not like Piketty or MacLean have come even close to disproving that it's the right tree.  They don't even seem to be aware of Rothbard's best arguments, which are the same as the best arguments of Buchanan and the Ostroms.  You certainly weren't aware of Rothbard's best arguments.  But now you are. However, you really haven't clarified/defended your position on whether tax spending decisions should be made by, or for, the people. Well... you don't seem to think they should be made by the people.  But you really haven't fleshed out a case that they should be made for the people.  You should do so, if you want to avoid barking up the wrong tree.

I should probably spell out the relationship between importance and validity.  Right now we don’t know just how important Rothbard’s two papers are to society.  We don’t know the social importance of his two papers.  I know how important they are to me, but I don’t know how important they are to Peter Boettke, Alex Tabarrok or anybody else.  It’s certainly possible to see how many times Rothbard’s two papers have been cited.  But if citations/votes were a good measure of social importance, then spending/shopping/markets would be a waste of immense amounts of time, energy and brainpower.

Because Rothbard’s two papers are important to me, I have taken the time and made the effort to bring them to your attention.  So you now know that they are important to me, but you don’t know how important they are to me compared to Buchanan’s papers or the Ostrom’s papers.  So you can't easily discern how I would want you to divide your limited time and attention between all their papers.

By bringing Rothbard’s two papers to your attention, I’ve given you the opportunity to scrutinize them.  In computer lingo, you have the chance to try and debug them.  Given enough eyeballs, all bugs are shallow (Linus’s Law).  The more important Rothbard’s two papers are to society, the more attention that they should receive, the more rigorous, relentless and ruthless the inspection of their validity.

This is the relationship between importance and validity.  Because we don’t currently know the true social importance of Rothbard’s two papers, their validity isn’t being optimally checked.  The same is true of national defense.  Because we don’t know the true social importance of national defense, its validity isn’t being optimally checked.

In all cases society’s attention/brainpower has to be divided somehow among a gazillion different things.  How do we divide society’s limited resources?  By voting?  By spending?  Or do we allow the division to be determined by a small handful of experts who don’t have any skin in the game?

Murray Rothbard VS James Buchanan

Earlier today Adam Gurri and I had an extended exchange on Twitter.  What set it off was when he shared this article by Paul Crider...  Beyond the Freedom of the Void.  The article blurred the lines between positive liberty and negative liberty.  Perhaps Crider made a valid point, but I didn't quite see what difference it would make.  Gurri responded that it would help people resist anarcho-capitalism (AC).  We went back and forth for a while and eventually ended up here...



Oh deja vu.  In a recent post I shared this blog entry by Matt Bruenig... #NotAllLibertarians: An Illustration.  He defended his wife's attack on Rothbard's argument that parents should not be forced to feed their children.  I left this comment on his entry...

If you're going to go after Rothbard.... then it's probably a good idea to attack his strongest argument... Football Fans vs Nature Fans... rather than his weakest one. Because, if you don't attack his strongest argument... then it appears that you're incapable of doing so.

It's true that a chain is only as strong as its weakest link.  It's also true that an argument is only as strong as its weakest link.  However, it's important to understand that Rothbard's deontological arguments ("rights") and consequential arguments (results) are entirely different chains.  Destroying an argument in the "rights" chain really doesn't destroy the results chain.  If it did, then the results chains created by Ostrom and Buchanan would also be destroyed.

Is Bruenig familiar with Rothbard's results chain?  I'm not sure.  It's not like he responded to my comment.  Gurri, on the other hand, did respond to my comment.  So I know for a fact that he has not read either "Toward a Reconstruction of Utility and Welfare Economics" (1956) or "The Myth of Neutral Taxation" (1981).  He is under the impression that he doesn't need to read them because Rothbard's crappy "rights" argument is all he needs to know to make an adequately informed decision about Rothbard and AC.

Personally, my first impression of AC and Rothbard was super negative.  I detested him.  But I perfectly understood that the only way to beat him and his followers was to truly understand him.  So I took the time and made the effort to familiarize myself with his work.  Much of it was garbage "rights" arguments, but there were also some solid results arguments here and there.  By the time that I read his two papers that I mentioned earlier, I had come to the conclusion that he had correctly diagnosed the government.  His remedy though was to abolish the government.  It was quite drastic.  Effectively evaluating his drastic remedy depends on fully understanding the disease.

In 1954 the Nobel economist Paul Samuelson wrote a really short paper... "The Pure Theory of Public Expenditure".  He pointed out that it's possible to benefit from some goods without paying for them.  For example, you can benefit from environmental protection (EP) even if you don't help pay for it.  Why buy the cow when you can get the milk for free?  The problem is... if you, and too many other people, don't pay for EP, then not enough will be supplied.  The amount supplied will be less than the amount that everybody truly wants.   So we can't expect people to voluntarily donate enough money to EP.  Therefore... taxes.  You don't have a choice whether you pay for goods like EP.  Paying taxes though doesn't reveal your valuation of EP. What Samuelson did was simply assume that planners would be able to adequately guess your true valuation of EP.

The Nobel economist James Buchanan agreed with Samuelson that the free-rider problem reasonably justifies taxation.  But as far as Samuelson's assumption of omniscient planners was concerned, Buchanan strongly disagreed.  In 1963 he wrote "The Economics of Earmarked Taxes".  He argued that earmarking would allow taxpayers to honestly reveal their true valuations of public goods.  Say that your valuation of EP is $1000 of your tax dollars.  If you only earmark $100 tax dollars to EP it doesn't mean that you'll be able to spend the difference on private goods (ie clothes).  It means that you'll have $900 tax dollars to earmark to other public goods (ie national defense)... which you value less than EP.  Therefore, there's absolutely no incentive to give a false signal.

In his 1956 paper Rothbard wrote, "Individual valuation is the keystone of economic theory."  This is entirely consistent with Buchanan.  Both thinkers strongly agreed that it's absurd to assume that planners can correctly divine or adequately predict people's valuations.  Also from Rothbard's paper...

The prime error here is the assumption that the preference scale remains constant over time. There is no reason whatsoever for making any such assumption. All we can say is that an action, at a specific point in time, reveals part of a man’s preference scale at that time. There is no warrant for assuming that it remains constant from one point of time to another. - Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics

We can compare it to Buchanan in 1982...

Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossible for an omniscient designer to know, unless, of course, we are to preclude individual freedom of will. - James Buchanan, Order Defined in the Process of its Emergence

Rothbard thoroughly understood that valuations can't be adequately/accurately conveyed by surveys/voting...

One of the most absurd procedures based on a constancy assumption has been the attempt to arrive at a consumer’s preference scale . . . Through quizzing him by questionnaires.  In vacuo, a few consumers are questioned at length on which abstract bundle of hypothetical commodities they would prefer to another abstract bundle, etc. Not only does this suffer from the constancy error, no assurance can be attached to the mere questioning of people. Not only will a person’s valuations differ when talking about them than when he is actually choosing, but there is also no guarantee that he is telling the truth. - Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics

Buchanan obviously agreed.  He certainly never said, "Planners aren't omniscient, therefore voting."  No economist in their right mind would argue that the optimal supply of defense can be determined by direct democracy.  Otherwise they'd have to argue that the optimal supply of milk can also be determined by direct democracy.

In the absence of people's valuations of government goods, many people will end up paying a lot of money for goods that they really don't value.  Here's Rothbard in 1981...

But this argument generates far more difficulties than it solves. It proves too much in many directions. In the first place, how much of the deficient good should be supplied? What criterion can the State have for deciding the optimal amount and for gauging by how much the market provision of the service falls short? Even if free riders benefit from collective service X, in short, taxing them to pay for producing more will deprive them of unspecified amounts of private goods Y, Z, and so on. We know from their actions that these private consumers wish to continue to purchase private goods Y, Z, and so on, in various amounts. But where is their analogous demonstrated preference for the various collective goods? We know that a tax will deprive the free riders of various amounts of their cherished private goods, but we have no idea how much benefit they will acquire from the increased provision of the collective good; and so we have no warrant whatever for believing that the benefits will be greater than the imposed costs. The presumption should be quite the reverse. And what of those individuals who dislike the collective goods, pacifists who are morally outraged at defensive violence, environmentalists who worry over a dam destroying snail darters, and so on? In short, what of those persons who find other people's good their "bad?" Far from being free riders receiving external benefits, they are yoked to absorbing psychic harm from the supply of these goods. Taxing them to subsidize more defense, for example, will impose a further twofold injury on these hapless persons: once by taxing them, and second by supplying more of a hated service. - Murray Rothbard, The Myth of Neutral Taxation

Here's Buchanan in 1968...

Over time, any individual in the community will expect this rule to produce unfavorable results in particular instances, results that run counter to his own preferences. Public-goods projects which he urgently desires may not be undertaken because a majority of his fellow citizens does not agree with his evaluation. Or, conversely, he may be required to contribute to the costs of projects that he considers to be worthless. - James Buchanan, The Demand and Supply of Public Goods

Buchanan and Rothbard both agreed that the forced-rider problem is a real problem.  They also agreed that fiscal illusion is a real problem.  Here's Rothbard in 1981...

A second important point is that, in contrast to the market, where consumers pay for received benefits (or, in nonprofit organizations, where members pay for psychic benefits), the State, like the robber, creates a total disjunction between benefit and payment. The taxpayer pays; the benefits are received, first and foremost, by the government itself, and secondarily, by those who receive the largess of government expenditures. - Murray Rothbard, The Myth of Neutral Taxation

Here's Buchanan in 1967...

The apparent splitting of the fiscal process into two parts was shown to produce potential gaps between preferred spending on public goods and services and preferred levels of taxation. Until and unless these gaps are eliminated, budget deficits tend to emerge from democratic decision processes. - James Buchanan, "Fiscal Policy" and Fiscal Choice

Let's compare their thoughts on congestion.  Here's Rothbard in 1974...

If there is an increased demand for a privately-owned good, consumers pay more for the product, and investors invest more in its supply, thus "clearing the market" to everyone's satisfaction. If there is an increased demand for a publicly-owned good (water, streets, subway, and so on), all we hear is annoyance at the consumer for wasting precious resources, coupled with annoyance at the taxpayer for balking at a higher tax load. Private enterprise makes it its business to court the consumer and to satisfy his most urgent demands; government agencies denounce the consumer as a troublesome user of their resources. Only a government, for example, would look fondly upon the prohibition of private cars as a "solution" for the problem of congested streets. Government's numerous "free" services, moreover, create permanent excess demand over supply and therefore permanent "shortages" of the product. - Murray Rothbard, The Fallacy of the 'Public Sector'

Here's Buchanan in 1955...

The answer to the whole highway problem lies in “pricing” the highway correctly. The existence of congestion on our streets and highways is solely due to the fact that we do not charge high enough “prices” for their use. This is one of the main functions of price in our free enterprise economy… [p]rice relieves potential congestion around our meat counters, our motels, and our models. Why do we shun its usage in the case of highway services?  - James Buchanan, Painless Pavements: Highways by High Finance

Rothbard and Buchanan agreed on many things.... individual valuation, prices, fiscal equivalence and the forced-rider problem.  They both understood the point and purpose of markets so it shouldn't be a surprise that they both came to the same correct conclusion that the fundamental problem with government is that it isn't a market.  The solution to this problem is where the two thinkers diverged.  Rothbard's solution was to abolish the government while Buchanan's was to repair it.  Here's Rothbard in 1974...

Government, in short, acquiring its revenue by coerced confiscation rather than by voluntary investment and consumption, is not and cannot be run like a business. Its inherent gross inefficiencies, the impossibility for it to clear the market, will insure its being a mare's nest of trouble on the economic scene. - Murray Rothbard, The Fallacy of the 'Public Sector'

As far as I know, this is the closest he came to critiquing the idea of repairing the government.

Ok, now let's jump over to Vincent Ostrom and Elinor Ostrom.  Here they are in 1971...

PPB analysis rests upon much the same theoretical grounds as the traditional theory of public administration. The PPB analyst is essentially taking the methodological perspective of an "omniscient observer" or a "benevolent despot." Assuming that he knows the "will of the state," the PPB analyst selects a program for the efficient utilization of resources (i.e., men and material) in the accomplishment of those purposes. As Senator McClelland has correctly perceived, the assumption of omniscience may not hold; and, as a consequence, PPB analysis may involve radical errors and generate gross inefficiencies. - Vincent Ostrom and Elinor Ostrom, Public Choice: A Different Approach to the Study of Public Administration

No surprise, they agree with Rothbard and Buchanan that it's a problem to assume that government planners are omniscient.

Here's what the Ostroms wrote in 1999 about individual valuation...

Whereas the income received for providing a private good conveys information about the demand for that good, taxes collected under the threat of coercion say little about the demand for a public good or service.  Payment of taxes indicates only that taxpayers prefer paying taxes to going to jail.  Little or no information is revealed about user preferences for goods procured with tax-supported expenditures.  As a consequence, the organization of collective consumption units will need to create alternative mechanisms to prices for articulating and aggregating demands into collective choices reflecting individuals' preferences for a quantity and/or quality of public goods or services. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices

Let's compare it to Rothbard in 1981...

We have no idea how much the taxpayers would value these services, if indeed they valued them at all. For example, suppose that the government levies a tax of X dollars on A, B, C, and so on, for police protection—for protection, that is, against irregular, competing looters and not against itself. The fact that A is forced to pay $1,000 is no indication that $1,000 in any sense gauges the value to A of police protection. It is possible that he values it very little, and would value it less if he could turn to competing defense agencies. Moreover, A may be a pacifist; so he may consider the State's police protection a net harm rather than a benefit. But one thing we do know: If these payments to government were voluntary, we can be sure that they would be substantially less than present total tax revenue. - Murray Rothbard, The Myth of Neutral Taxation

Also...

Since "benefits" are subjective, we cannot measure anyone's benefit on the market either, but we can conclude, from a person's voluntary purchase, that his (expected) benefit was greater than the value to him of the money given up in exchange. If I buy a newspaper for 25 cents, we can conclude that my expected benefit is greater than a quarter. But since taxes are compulsory and not voluntary, we can conclude nothing about the alleged benefits that are paid for with them. Suppose, in analogy, that I am forced at gunpoint to contribute 25 cents for a newspaper and that that newspaper is then forcibly hurled at my door. We would be able to conclude nothing about my alleged benefit from the newspaper. Not only might I be willing to pay no more than 5 cents for the paper, or even nothing on some days, I might positively detest the newspaper and would demand payment to accept it. From the fact of coercion there is no way of telling. Except that we can conclude that many people are not getting 25 cents' worth from the paper or indeed are positively suffering from this coerced "exchange."   Otherwise, why the need to exercise coercion? Which is all that we can conclude about the "benefits" of taxation. - Murray Rothbard, The Myth of Neutral Taxation

The Ostroms also agreed with Rothbard and Buchanan that fiscal illusion is a problem.  Here the Ostroms are in 1999....

The working out of financial arrangements between collective consumption units and production units is one of the most difficult problems faced by entrepreneurs in the public economy.  Without market prices and market transactions, the act of paying for a good generally occurs at a time and place far from the act of consuming the good: individual costs are widely separated from individual benefits.  Yet a principle of fiscal equivalence--that those receiving the benefits from a service pay the costs for that service--must apply in the public economy just as it applies in a market economy.  Costs must be proportioned to benefits if people are to have any sense of economic reality.  Otherwise beneficiaries may assume that public goods are free goods, that money in the public treasury is "the government's money," and that no opportunities are foregone in spending that money.  When this happens the foundations of a democratic society are threatened.  The alternative is to adhere as closely as possible to the principle of fiscal equivalence and to proportion taxes as closely as possible to benefits received. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices

Here's Elinor Ostrom in 2005...

There are two principle means to assess equity: (1) on the basis of the equality between individuals' contributions to an effort and the benefits they derive and (2) on the basis of differential abilities to pay.  The concept of equity that underlies an exchange economy holds that those who benefit from a service should bear the burden of financing that service.  Perceptions of fiscal equivalence or a lack thereof can affect the willingness of individuals to contribute toward the development and maintenance of resource systems. - Elinor Ostrom, Understanding Institutional Diversity

Rothbard, the Ostroms and Buchanan would perfectly agree...

1. The efficient allocation of resources depends on everyone's valuations
2. Neither taxation nor voting adequately/accurately reveals people's valuations
3. Government planners can't adequately/accurately divine or predict people's valuations

These three things mean that the government won't optimally supply any goods.  Here are the Ostroms in 1999...

Because most public goods and services are financed through a process of taxation involving no choice, optimal levels of expenditure are difficult to establish. The provision of public goods can be easily over-financed or under-financed. Public officials and professionals may have higher preferences for some public goods than the citizens they serve. Thus they may allocate more tax monies to these services than the citizens being served would allocate if they had an effective voice in the process. Under-financing can occur where many of the beneficiaries of a public good are not included in the collective consumption units financing the good. Thus they do not help to finance the provision of that good even though they would be willing to help pay their fair share. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices

We can see exactly where the Ostroms converge with Buchanan and diverge from Rothbard.  Rothbard was certain that the only way to give citizens an effective voice was to abolish the government.

Rothbard allocated a lot of time and intelligence to trying to abolish the government.  What if he had redirected his limited resources to trying to repair the government?  What if he had thrown the full weight of his support behind the solution offered by Buchanan and the Ostroms?

In any case, it should be really straightforward that it's stupid for Bruenig, Gurri and anybody else to attack Rothbard's weakest argument.  They should attack his strongest arguments.

On Twitter, Gurri has been sharing many critiques of Nancy MacLean's book Democracy In Chains.  In her book she attacks Buchanan.  But does she attack his strongest arguments?  No.  Unfortunately she doesn't.  Instead she attacks things like his association with the Koch brothers.  I certainly appreciate that she chose to attack Buchanan, but it would have been far more beneficial if she had actually attacked his strongest arguments.

Part of the problem is that there really isn't a market for arguments.   There isn't a system in place for people to use their money to publicly help determine/reveal the strength of an argument/paper.  I tried to explain this to Gurri a few months ago... Commerce As Communication.  In that entry I shared a potential solution that could be used for the Liberal Currents website.  In my example I even included "The Myth Of Neutral Taxation".  Evidently my explanation wasn't that effective though because Gurri didn't see the benefit of turning his website into a market.

Admittedly, it's entirely possible that I'm misreading Rothbard, Buchanan and the Ostroms.  But it's certainly the case that Gurri hasn't even read Rothbard's best work.  And by "best" I mean that it closely corresponds with much of the work done by Buchanan and the Ostroms.  These more credible thinkers shared many of Rothbard's concerns about the government.  Can Gurri make an adequately informed decision about Rothbard or AC without actually having read his best work?   Well... in this entry I have shared several of the most relevant passages.  They should be enough to help Gurri see Rothbard and AC in a new light.

Let's imagine that Rothbard, Buchanan and the Ostroms are 100% correct about the fundamental problems with the government.  In this case, Rothbard will be widely recognized for his role in helping to uncover the truth.  The immense importance of this truth will eclipse Rothbard's mistakes.

What about Gurri?  He should help to uncover the truth.  The more responsible he is for doing so, the greater his place in history.

Now let's imagine that Rothbard, Buchanan and the Ostroms are 100% incorrect about the fundamental problems with the government.  In this case, Rothbard will be counted among the many people who spent their entire lives barking up the wrong trees.

What about Gurri?  He should help to uncover the truth.  The more responsible he is for disproving Rothbard, Buchanan and the Ostroms, the greater his place in history.

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...

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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. :)

Friday, January 27, 2017

Anarcho-capitalism VS Pragmatarianism

[Also posted on Medium: How To Train Your Leviathan]

Patrik Schumacher, who I blogged about yesterday, replied to my tweet...


It's super cool that he replied!

Murray Rothbard is largely acknowledged as the founder of anarcho-capitalism.  He really hated the government.  If there had been a button that would have entirely destroyed the government, then he would have pushed the button until his thumb blistered.

If Rothbard had pushed the button, then he, and he alone, would have answered the age old question... what is the proper scope of government?

Let's carefully consider what Herbert Spencer had to say about the proper scope of government...

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

To the assertion that the boundary line of State-duty as above drawn is at the wrong place, the obvious rejoinder is— show us where it should be drawn. This appeal the expediency-philosophers have never yet been able to answer. Their alleged definitions are no definitions at all. As was proved at the outset, to say that government ought to do that which is "expedient," or to do that which will tend to produce the "greatest happiness," or to do that which will subserve the "general good," is to say just nothing; for there are countless disagreements respecting the natures of these desiderata.  A definition of which the terms are indefinite is an absurdity. Whilst the practical interpretation of "expediency" remains a matter of opinion, to say that a government should do that which is "expedient," is to say that it should do, what we think it should do!

Still then our demand is—a definition. Between the two extremes of its possible action, where lies the proper limitation?  Shall it extend its interference to the fixing of creeds, as in the old times; or to overlooking modes of manufacture, farming operations, and domestic affairs, as it once did; or to commerce, as of late—to popular education, as now—to public health, as already—to dress, as in China—to literature, as in Austria—to charity, to manners, to amusements?  If not to all of them, to which of them?  Should the perplexed inquirer seek refuge in authority, he will find precedents not only for these but for many more such interferences.  If, like those who disapprove of master-tailors having their work done off the premises, or like those who want to prevent the produce of industrial prisons displacing that of the artizans, or like those who would restrain charity-school children from competing with seamstresses, he thinks it desirable to meddle with trade-arrangements, there are plenty of exemplars for him.  There is the law of Henry VII., which directed people at what fairs they should sell their goods; and that of Edward VI., which enacted a fine of £100 for a usurious bargain; and that of James I., which prescribed the quantity of ale to be sold for a penny; and that of Henry VIII., which made it penal to sell any pins but such as are "double headed, and their head soldered fast to the shank, and well smoothed; the shank well shaven; the point well and round-filed and sharpened."  He has the countenance, too, of those enactments which fixed the wages of labour; and of those which dictated to farmers, as in 1533, when the sowing of hemp and flax was made compulsory; and of those which forbade the use of certain materials, as that now largely-consumed article, logwood, was forbidden in 1597.  If he approves of so extended a superintendence, perhaps he would adopt M. Louis Blanc's idea that "government should be considered as the supreme regulator of production;" and having adopted it, push State-control as far as it was once carried in France, when manufacturers were pilloried for defects in the materials they employed, and in the textures of their fabrics; when some were fined for weaving of worsted a kind of cloth which the law said should be made of mohair, and others because their camlets were not of the specified width; and when a man was not at liberty to choose the place for his establishment, nor to work at all seasons, nor to work for everybody.  Is this considered too detailed an interference?  Then, perhaps, greater favour will be shown to those German regulations by which a shoemaker is prevented from following his craft until an inspecting jury has certified his competence; which disable a man who has chosen one calling from ever adopting another; and which forbid any foreign tradesman from settling in a German town without a licence. And if work is to be regulated, is it not proper that work should be provided, and the idle compelled to perform a due amount of it?  In which case how shall we deal with our vagrant population?  Shall we take a hint from Fletcher of Saltoun, who warmly advocated the establishment of slavery in Scotland as a boon to "so many thousands of our people who are at this day dying for want of bread"? or shall we adopt the analogous suggestion of Mr. Carlyle, who would remedy the distresses of Ireland by organizing its people into drilled regiments of diggers?  The hours of labour too—what must be done about these?  Having acceded to the petition of the factory-workers, ought we not to entertain that of the journeyman-bakers? and if that of the journeyman bakers, why not, as Mr. Oobden asks, consider the cases of the glass-blowers, the nightmen, the iron-founders, the Sheffield knife-grinders, and indeed all other classes, including the hardworked M.P.'s themselves?  And when employment has been provided, and the hours of labour fixed, and trade-regulations settled, we must decide how far the State ought to look after people's minds, and morals, and health.  There is this education question: having satisfied the prevalent wish for "government schools with tax-paid teachers, and adopted Mr. Ewart's plan for town-libraries and museums, should we not canvass the supplementary proposal to have national lecturers? and if this proposal is assented to, would it not be well to carry out the scheme of Sir David Brewster, who desired to have "men ordained by the State to the undivided functions of science"—"an intellectual priesthood," " to develop the glorious truths which time and space embosom*"? Then having established "an intellectual priesthood" to keep company with our religious one, a priesthood of physic, such as is advocated by certain feeless medical men, and of which we have already the germ in our union doctors, would nicely complete the trio. And when it had been agreed to put the sick under the care of public officials, consistency would of course demand the adoption of Mr. G. A. Walker's system of government funerals, under which "those in authority" are "to take especial care" that "the poorest of our brethren" shall have "an appropriate and solemn transmission" to the grave, and are to grant in certain cases "gratuitous means of interment."  Having carried out thus far the communist plan of doing everything for everybody, should we not consider the peoples' amusements, and, taking example from the opera-subsidy in France, establish public ball-rooms, and gratis concerts, and cheap theatres, with State-paid actors, musicians, and masters of the ceremonies: using care at the same time duly to regulate the popular taste, as indeed, in the case of the Art-Union subscribers, our present Government proposed to do?  Speaking of taste naturally reminds us of dress, in which sundry improvements might be enforced; for instance—the abolition of hats: we should have good precedents either in Edward IV., who find those wearing "any gown or mantell" not according to specification, and who limited the superfluity of peoples' boot-toes, or in Charles II., who prescribed the material for his subjects' grave-clothes. The matter of health, too, would need attending to; and, in dealing with this, might we not profitably reconsider those ancient statutes which protected peoples' stomachs by restricting the expenses of their tables; or, remembering how injurious are our fashionable late hours, might we not advantageously take a hint from the old Norman practice, and (otherwise prompted) fix the time at which people should put out their fires and go to bed; or might we not with benefit act upon the opinion of M. Beausobre, a statesman who said it was "proper to watch during the fruit season, lest the people eat that which is not ripe"? And then, by way of making the superintendence complete, would it not be well to follow the example of the Danish king who gave directions to his subjects how they should scour their floors, and polish their furniture?

* See Address to the British Association at Edinburgh, in 1850.

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Lots of Kings have certainly had very different answers to the question of the government's proper scope.

Let's engage in some lateral thinking by asking this question... what is the proper scope of the private sector?  How many people answer this question?  How do they answer it?

Pretty much everybody helps to answer the question of the private sector's proper scope and they do so by spending their money.  Are cars within the proper scope of the private sector?  All the people who buy cars help to answer this question.  Same thing with all the people who invest their money in companies that produce cars.

Rothbard correctly argued that the market is the best way to determine what should be done.  But then he undermined his own argument when he was so happy to admit that he would have been very happy to push a button that would have abolished the government.  By happily pushing the button... he, rather than the market, would have determined what the government should do!  He would have answered the question for everybody!

Of course there isn't a single button that would abolish the government.  So anarcho-capitalism would have to be implemented another way.  It could certainly be implemented through democracy.  It could be implemented through revolution.  It could be implemented by a powerful enough ruler.  But there's only one single way that anarcho-capitalism could be implemented on the basis of its own premise.

If people could choose where their taxes go... aka "pragmatarianism"... then each and every person could use their tax dollars to answer the question... what is the proper scope of government?  Is public education within the proper scope of government?  All the people who gave their tax dollars to public schools would help to answer this question.  If too few people gave their tax dollars to public schools, then the market, rather than voters... or congress... or the president... or Rothbard, would have determined that public education is not within the proper scope of government.

What about compulsory taxation?  Is it within the proper scope of government?  Well... in a pragmatarian system... the IRS really wouldn't collect everybody's taxes.  If you wanted a public school to have your tax dollars... then you'd give your tax dollars directly to that school.  They'd give you a receipt and you'd keep all your receipts in case you needed to prove to the IRS that you had indeed paid your "fair" share.

Therefore, if you did give your tax dollars to the IRS... it would be because you wanted to help fund their efforts to ensure that everybody paid their fair share.  And in giving your tax dollars to the IRS... you would be helping to answer the question of whether compulsory taxation is within the proper scope of government.

So, with all of this in mind, if too few people gave their tax dollars to the IRS, then the market, rather than voters... or congress... or the president... or Rothbard, would have determined that compulsory taxation is not within the proper scope of government.  And voila!  We would have arrived at anarcho-capitalism by taking the only legitimate path.

It's entirely possible that anarcho-capitalism is the correct answer.  But it's essential that we do not leap to this conclusion.  It's imperative that we do not bypass the market process of everybody using their own money to answer the question of what should be done.  We have to understand how and why the market process is the correct process.  Then we can understand how and why the market process will produce the correct answer.  Will the correct answer be anarcho-capitalism?  Personally, I don't think that it will be.  But for sure I could be wrong.  In any case, I understand the market process which is why I will respect whatever answer it produces.  In no case will I feel comfortable overriding or overruling the answer that is produced by the market process.

To place any single possible answer... such as anarcho-capitalism... on any sort of pedestal... implies that the correct answer is easy to guess or divine.  This implication will most certainly cast a shadow over the market process.

While I am a big fan of Rothbard, in this regard I am a much bigger fan of Buchanan...

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I want to argue that the "order" of the market emerges only from the process of voluntary exchange among the participating individuals. The "order" is, itself, defined as the outcome of the process that generates it. The "it," the allocation-distribution result, does not, and cannot, exist independently of the trading process. Absent this process, there is and can be no "order."

What, then, does Barry mean (and others who make similar statements), when the order generated by market interaction is made comparable to that order which might emerge from an omniscient, designing single mind? If pushed on this question, economists would say that if the designer could somehow know the utility functions of all participants, along with the constraints, such a mind could, by fiat, duplicate precisely the results that would emerge from the process of market adjustment. By implication, individuals are presumed to carry around with them fully determined utility functions, and, in the market, they act always to maximize utilities subject to the constraints they confront. As I have noted elsewhere, however, in this presumed setting, there is no genuine choice behavior on the part of anyone. In this model of market process, the relative efficiency of institutional arrangements allowing for spontaneous adjustment stems solely from the informational aspects.

This emphasis is misleading. Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossible for an omniscient designer to know, unless, of course, we are to preclude individual freedom of will. - James Buchanan, Order Defined in the Process of its Emergence

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Giving people the freedom to choose where their taxes go will create a market within the public sector.  The market process of people trading their tax dollars for public goods will certainly produce some government "order".  But because I am really not omniscient, I really can't know, beforehand, exactly what the order will be.  However, I do understand the market process itself which is why I will respect the order that it produces far more than I would respect the order produced by any other process.

The order produced by a king?  I'd shit on it.  The order produced by congress and a president?  I'd shit on it.  The order produced by democracy?  I'd shit on it.  The order produced by Rothbard pushing a button?  I'd shit on it.  The order produced by the market?  I definitely wouldn't shit on it.

To be clear, democracy would be needed to implement pragmatarianism.  But democracy really wouldn't be determining the order of government... it would be choosing the system that determined the order of government.  Millions and millions of taxpayers spending their own tax dollars would determine the order of government.

How to get democracy to choose pragmatarianism?  We start small.  We persuade Netflix to allow its subscribers to choose where their fees go.  If we can't persuade Netflix that this process will produce a far superior order... then we'll have to start even smaller.  We'll create our own website where subscribers can choose which articles they spend their fees on.  Once everyone can clearly see that this order is indeed superior, then the NY Times will create a pragmatarian market, so will Netflix and the rest of the dominoes will quickly fall.  The last, and biggest, domino to fall will be the government.  But it will easily fall because by then every voter will clearly see that the order produced by the market is far superior to the order produced by any other system.

In my blog entry, Pushing For A Pubmar, I shared this relevant illustration that took all my artistic skills to create...


Thursday, January 26, 2017

Patrik Schumacher

[Also posted to Medium: Patrik Schumacher]


You must be shapeless, formless, like water. When you pour water in a cup, it becomes the cup. When you pour water in a bottle, it becomes the bottle. When you pour water in a teapot, it becomes the teapot. Water can drip and it can crash. Become like water my friend. - Bruce Lee

When I was a little kid growing up in Los Angeles, I spent lots of time sitting in bumper to bumper traffic...




Of course I thought it was entirely unfair, and ridiculous, that traffic on the freeway was so unequal.  I was pretty darn sure that the center divider should adjust accordingly.  The freeway should adapt to its demand like water adapts to its cup.

A few months ago on Medium I read this really great interview with Patrik Schumacher.  It was the first time that I had ever heard of him.  I was super impressed!  He is a prominent architect with a really great grasp of economics.

Monday, March 28, 2016

Fully Including And Using Brains

Reply to thread: Clarifying The Popularity Of Three Economic Rules

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Ad Nihilo,

1. You're not addressing my main argument. Either you know that you can't hit the target... or... you're not seeing the target. Just in case it's the latter...

I value X and Y but I value X more than Y...

X > Y

A. I vote for Y
B. Y happens to be implemented
C. Y uses resources
D. The resources that Y uses could have been used for X
E. Quiggin's Rule is broken
F. You agree that Quiggin's Rule should not be broken

2. A large chunk of your argument is relevant to anarcho-capitalism. I am not an anarcho-capitalist. I am a pragmatarian. Of course you're welcome to attack anarcho-capitalism in this thread! But please don't be under the impression that you're actually attacking my own view.

3. Yes, we pool our cognitive resources. I strongly agree with this concept. In fact, here's a slice of what I recently wrote in another thread...

Today I watched this excellent video on Youtube... Human Cognitive Evolution: How the Modern Mind Came into Being - Merlin Donald. He argues that humans form a distributed network. Our brains aren't literally linked together though. So in order for the network to process information... we each need to share our individual information. If we share inaccurate information, then the output will be inaccurate. This is the basic concept of garbage in, garbage out (GIGO).

Everybody would benefit from a network that's...

1. larger
2. more accurate
3. more efficient

"Homing in on the right solution" is inefficient and it's also inaccurate. It takes too long to access information that most likely doesn't come very close to people's valuations. Democracy is certainly efficient... but it's far less accurate than homing. Representation is a small, inefficient and inaccurate network. Removing any amount of brains from the network is extremely stupid. This is why slavery is also stupid. Unfortunately, this is not why we oppose slavery. We oppose slavery for moral reasons. In other words, we oppose slavery for the wrong reasons.

You're bored with the scenario of people selling shit to each other. You're more interested in the scenario of replacing voting with spending. From my perspective your interest is incoherent. This is because, from my perspective, both scenarios address the issue of improving the efficiency and accuracy of communication.

So I think that your incoherence stems from your failure to perceive commerce as communication. What we consume depends entirely on how and what we communicate to each other. Your analysis will become far more coherent if you manage to focus on the communication aspect.

I'm sure that you agree that slavery is stupid. But why, exactly, do you think it's stupid? As I explained, I think it's stupid because it removes brains from the network. The more brains that are removed from the network, the less powerful it is. By this same notion... the less fully a network utilizes the brains it contains, the less powerful it is.

As you pointed out... our society has different institutions. Here are three very different institutions...

A. democracy
B. representation
C. markets

These three institutions are very different. As such, they can not be equally good at...

1. including brains
2. utilizing brains

Democracy: good at including brains, bad at using them. In that same other thread I wrote...

One clear drawback of this method is that it's far more time consuming than simply voting. Even if there was an app for it then it still wouldn't be as fast as people simply raising their hands. Not only is it more time consuming... but it requires more mental effort. Unless you're Buridan's ass... it shouldn't be too difficult to decide that you prefer to eat at The Dumpling Palace. It requires more brainpower to decide exactly how much you prefer to eat at The Dumpling Palace. It's one thing to determine your preference. It's another thing to determine the intensity of your preference.

Representation: incredibly terrible at including brains, bad at using them. Elizabeth Warren doesn't get to decide for herself how she spends her portion of the budget. Which means that her brainpower isn't fully utilized.

Markets: good at including brains, good at using them. On a daily basis, each and every individual makes difficult decisions about how to allocate their limited resources. These difficult decisions fully utilize their brainpower. These difficult decisions utilize all the information that's stored in their memories. These difficult decisions utilize all their hindsight, insight and foresight. These difficult decisions utilize all their processing power.

As a pragmatarian.... I have absolutely no desire to eliminate the public sector. My desire is for human brainpower to be fully applied to public goods like it's fully applied to private goods. This could be accomplished by creating a market in the public sector. People would simply choose where their taxes go.

However, the public sector is hardly the only space that's missing a market. Right now I'd definitely be willing to pay you a penny for your thoughts! But I definitely wouldn't be willing to pay you a million dollars for your thoughts! Narrowing it down to an exact amount would require brainpower.

You can certainly argue that we are better off not knowing how much I truly value your time and thoughts. But then you'd be arguing that we're better off when networks do not fully utilize their brains.

Companies also fail to fully utilize brainpower...

Russ Roberts: Let's talk about your 1937 paper, "The Nature of the Firm." You were trying to answer a question--an interesting question, remains a good question; it was a good question in 1937, it's still a good question, which is: If capitalism and markets and prices, the Hayekian system of communicating information via price signals, if it works so well, why do firms exist? Because firms are almost by definition top down rather than bottom up. They use command and control rather than purchases within the firm, although there are exceptions to that. Some firms do use price signals for their decision-making inside the firm. But many firms do not. Their decisions are made not by prices but by fiat, by decisions on the top. Now, you wrote that paper when you were very, very young, the first part of it, correct?
Ronald Coase: That's right. I wrote it while I was an undergraduate. It seems obvious to me. If you go into a firm and you say to someone: Why did you do this? He'd say: Because I was told to do it. He doesn't talk about pricing at all. Almost of all the things you do within a firm are not controlled directly by prices at all. Your boss tells you what to do and you do it.
Russ Roberts: How did you come to write that paper as an undergraduate.
Ronald Coase: Oh, I was interested in how firms actually operate, and if you start studying how firms actually operate you find that they are not concerned with prices directly at all. A person who is working in a firm does what he's told. That's the way it operates.
Russ Roberts: So, a firm is an island of socialism in a capitalist world.

Also...

We are biased toward the democratic/republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups. It is more tyrant than mob because it should be. In some sense, startups can’t be democracies because none are. None are because it doesn’t work. If you try to submit everything to voting processes when you’re trying to do something new, you end up with bad, lowest common denominator type results. — Peter Thiel, Girard in Silicon Valley

A firm is a network of brains. It makes sense that firms can't be democracies. As I pointed out, democracies are good at including brains, but bad at using them. Firms can clearly be dictatorships. But even the wisest and most benevolent dictatorships can't fully utilize the brains they contain. If we accept the assumption that it's desirable for brains to be fully utilized... then the logical conclusion is that firms should be markets. A firm is a boat that should be steered by the spending decisions of the people in the boat.

4. I am familiar with David Graeber's work. Just like I'm already familiar with Mariana Mazzucato's work. Unfortunately, I don't have a link to prove that I am familiar with her work. But if you look on my blog you'll see that I link to the Crooked Timber blog. I consistently take the time and make the effort to learn and understand my opponents' arguments.

The only significant cost this will impose on you is the time cost it will take to actually read shit and get properly informed. But then wouldn't you rather argue things in ignorance on the internets with people who are even more ignorant than you? The latter is certainly much more entertaining :p - Ad Nihilo

In the OP of this thread, I said that Quiggin's Rule was named after the economist John Quiggin. Quiggin is a liberal economist. He's certainly properly informed so I would definitely prefer to argue with him. So here's what I wrote to him... The Inadequacy Of The Opportunity Cost Concept. And here's the extent of his response. It's... underwhelming. To say the least.

You are extremely informed. Well... at least compared to other members of Nation States. And unlike Quiggin, your response is definitely not underwhelming. That being said, your response is nowhere near the target. You sure made a lot of shots... but none of them were even in the right direction. None of them came close to addressing my actual argument.

I'm pretty sure that Quiggin is informed enough to clearly see my target. But... I'm guessing he's also informed enough to know that he can't hit it. Therefore... he decided to simply share my target rather than attempt to hit it. Which is entirely understandable.

If you make the effort, I'm sure that you could see my target. But, to be completely honest, I'd be surprised if you could actually hit it given that Quiggin was smart enough to not even hazard a shot. Quiggin didn't link me to Graeber... but you did. Is it because Quiggin is not familiar with Graeber's work? Nope. Quiggin didn't link me to Mazzucato... but you did. Is it because Quiggin is not familiar with her work? Nope. Quiggin didn't link me to Kay... but you did. Is it because Quiggin is not familiar with Kay's work? Nope. Quiggin didn't link me to Piketty's work... and neither have you. Is it because Quiggin is not familiar with Piketty's work? Nope.

Quiggin didn't make these shots because he understands that none of them would come even close to the target.