Critics of Markets have Intervention Denial

There is a meme, an infectious idea, that has spread like a mental plague among advocates of greater governmental intervention. This idea is “intervention denial,” the claim that the US and other developed economies have had complete economic freedom. The critics of markets usually use deliberately mind-numbing language such as “capitalism,” although sometimes they do claim more starkly that today’s economies are a “free market” and practice “free banking” and “free trade.”

Many examples of intervention denial can be found by searching for the submeme “unbridled capitalism” as well as “greed” combined with “capitalism” or statements such as “people over profits.” For example, there is a web article titled “Unbridled Capitalism and the Blight of Greed” which defines “capitalism” as “the economic system in which the pursuit of wealth remains in the control of individuals, free from government regulation or interference.” The article states that “Capitalism, after all, suffers from a fatal flaw – Greed.” Intervention denial has infected well-meaning people in high places, such as the Pope, who declared, “Unbridled capitalism has taught the logic of profit at any cost.”

“Denial” in this context means the refusal to believe in evidence. For example, Holocaust denial is the refusal to accept the enormous evidence of mass murders by the Nazis. There are science denials of various sorts. Intervention denial is one of the most destructive memes in the mental universe human beings live in, because intervention denial blocks effective solutions to social problems.

Consider the claim that the US has had destructive “free banking.” This false meme originated in historians who called the US banking system prior to the civil war “free banking,” even though the banks were tightly controlled by state governments, such as prohibiting banks from establishing branches beyond the state. In true free-market money and banking, there is no restriction or imposed cost on any currency, account, or financial institution so long as its operation is honest and peaceful.

The intervention deniers claim that the USA has a free market in money and banking, disregarding the obvious facts that the US financial system is tightly regulated by the Federal Reserve (“the Fed”), the FDIC, the SEC, and the US Treasury Department. These institutions and Congress bailed out the financial system after the interventions caused the Depression of 2008, as they did with previous busts. The US dollar and interest rates are controlled by the central planning of the Fed. This is the system that intervention deniers call a “free market.”

In a truly free market, there would be no restriction, tax, subsidy, or mandate that alters honest and peaceful human action. Those who claim the US economy is “unbridled” talk as though there were no regulations nor any taxation, let alone subsidies. The extent and effects of regulations on the US economy can be read in the study “Ten Thousand Commandments” published by the Competitive Enterprise Institute, as well as the regulations data base of the Mercatus Center at George Mason University. The economic damage done by intervention can also be read in the on-going study “Economic Freedom of the World,” at

How can an economy be “unbridled” if enterprise, consumption, and produced wealth are all afflicted with heavy taxation? Intervention deniers talk as though there were no income tax, federal excise taxes, state sales taxes, value-added taxes, and taxes on buildings and equipment. A truly free market would also not have any subsidies, such as the billions of dollars now going into the big farms, along with other corporate welfare.

All these interventions – taxes, subsidies, restrictions, and mandates – distort prices, wages, interest rates, profits, and quantities. The social problems we can observe: unemployment, low wages, unaffordable housing, slow growth, recessions, pollution, can be traced back to government intervention. Consider pollution, for example. Intervention deniers claim that “capitalism” and “greed” result in pollution and environmental destruction. But a truly free market is free of subsidies. When firms and their customers do not pay the full social cost of the products, as the social cost of pollution is imposed on others, that is an implicit subsidy. In a truly free market, with full enforcement of property rights, pollution is treated as a trespass, an invasion of others’ property, requiring full compensation. The problem is not that firms and markets are unbridled, but that ecological destruction is subsidized. The subsidies combine with a legal system that bridles the population with a legal inability to sue the polluters for damages.

There is indeed a bridle to a free market: laws prohibiting force and fraud. A pure market economy consists of voluntary human action. The bridle is on thieves, not on peaceful and honest producers, traders, and consumers.

When interventions are pointed out to the deniers, they respond that these taxes, restrictions, subsidies, and mandates are of little significance. This is similar to Holocaust deniers who respond that perhaps a few Jews and Gypsies were murdered by the Nazis, but not on the large scale that they deny. Intervention deniers do not deny the existence of the Federal Reserve system, but they claim it is a private free-market organization. Deniers of all sorts reject data and other evidence, use undefined terms such as “capitalism” and “greed,” and point to their favored authors, articles, and data as though these present unbridled truth.

“Greed” means wanting and taking more than one morally deserves. A person morally deserves that which is earned by labor and received from voluntary gifts. The honest acquisition of wealth may be avarice, but not greed. Thieves are greedy, and those who indirectly steal by getting government to do or protect their forced taking are also greedy. Intervention denial is ultimately a refusal to think it through, to fully understand the ethics, politics, and economics of human life.

From the Comments: Asylum Seekers and the Canadian Experience

Dr Amburgey takes some precious time out of his schedule to rebut Dr J:


I can understand your reluctance to yet again engage with Professor Pinocchio’s fact-resistant Islamophobia. However you must give him credit for actually using some real data. Granted the choice of country and time period are idiosyncratic [id est cherrypicked] but anything not pulled straight from his anus is a dramatic change. Should you feel like responding in kind, use this: Canada for the period 2004 – 2013. Top 8 countries of origin for refugees landing in Canada

Columbia – 17381
China – 15344
Sri Lanka – 12326
Pakistan – 10641
Haiti – 7872
Mexico – 6512
India – 4988
USA – 4451

Based on this data Catholicism and Hinduism far outstrip Islam as religions producing sick societies.There is currently no other view that is even modestly supported by anything but ideological intransigence.

Indeed. Only the most ideological of ideologues continue to pretend that Islam is responsible for the problem in the Middle East.

When the Austro-Hungarian empire collapsed, the Holocaust happened. One could argue that, because the state is less efficient on the post-Ottoman world, what we’re witnessing is a process similar to the one we witnessed in the Occident, only in a much more haphazard way.

BC’s weekend reads

  1. Introducing… Jesus and Mo
  2. On private property and the commons
  3. Why Merkel’s Kindness to Asylum Seekers Could Reflect a German Soft Spot for Islam
  4. Why I find the Mthwakazi monarchy restoration unjustified
  5. September (a song about me)
  6. From the Far Right to the Far Left
  7. Beyond Neoliberalism (book review)

E. O. Wilson and Spontaneous order

Jump right to the 17:28 mark if you don’t care to spend some quality time with a delightful old man.

“We share with insects the mysterious instinct to build complex societies… [talks about an ant colony filled with concrete then dug out of the earth…] Here was a labyrinthine web of underground highways, mini-colonies, gardens, and garbage dumps. But it was the scale of it that was breathtaking. This was an ant metropolis, a Manhattan of the insect world.

“Now, how could an animal with a brain smaller than a pinhead possibly construct and maintain a city of this size and complexity?”

Because spontaneous order! This view is why Don Lavoie cites E.O. Wilson so much. Both are fascinated (as we all should be) with systems where the interaction of its constituent parts yields outcomes more complex than any subset of those constituent parts could come up with. These complex outcomes result from relatively simple information transmission mechanisms so that behaviors of each part influence and are influenced by the rest of the system.

Asylum Seekers and Western Military Intervention

Recently, Brandon Christensen, the capable Editor here tried to take me behind the woodpile, again! (Note for our overseas readers: To take someone behind the woodpile usually a child – is to spank him to try to improve his attitude.) This is what happened: NOL re-published two of my essays “Hypocrisy” and “Muslim Refugees in Perspective” where I asserted (again) that many Muslim societies are failed societies or otherwise sick. Brandon asserted (again) that any apparent linkage between Islam in general and social pathologies is just that, an appearance. Instead he seems to argue, Muslim societies that are in any kind of trouble owe their trouble mostly (or much?) to Western intervention in general and to American intervention in particular, with a special emphasis (I am guessing) on military intervention.

There is a partial test of these competing beliefs in an examination of refugee applications to Germany during a recent period.

Between January and August 2015, Germany received 147,500 applications for asylum from the top ten countries of origin of the applicants. (I am rounding numbers to the next hundred.)* Of these, 79% came from predominantly Muslim countries.

Almost half of the asylum seekers from Muslim countries – 48% – came from Syria, a mostly Muslim country where the US and the West had notably not intervened (or only superficially) by August 2015, the end of our period of observation. If you will recall, the US president has earlier drawn a red line beyond which the Syrian dictator couldn’t go on waging war on his people. The Syrian dictator ignored the warning and nothing happened. That’s as non-interventionist as it gets!

Of the asylum seekers from predominantly Muslim countries, 23% came from Iraq and from Afghanistan together, two countries that have in fact experienced American and Western (even international) military intervention in the past twenty years.

Reminder: It’s worth remembering that the intervention in Afghanistan was launched to dislodge a regime installed by force of arms that sheltered terrorists, according to the Al Qaida terrorists themselves, and according to the regime itself. Several years earlier, the same terrorist group sheltered by Afghanistan – Al Qaida – had declared war on the United States, incidentally.

Of the remainder of asylum seekers from predominantly Muslim countries, 29% came from Kosovo. That’s more than from Iraq and Afghanistan combined.

Reminder: In 1998, the national Communist Serbian dictator Milosevic ordered all ethnic Albanians of Kosovo, more than 90% of the population to leave under threat of death. This episode of ethnic cleaning cost about 10,000 lives. NATO, led by the US quickly intervened militarily and forced Milosevic to leave the (overwhelmingly Muslim) Kosovar in peace.

NATO had previously intervened militarily in Bosnia, another part of the dissolving Yugoslav Republic, to save the non-Serb population from Serb ethnic cleansing . Of the total population, a plurality, about 40%, were Muslims. (There are no Bosnian asylum seekers visible in the sample I am discussing here. Bosnia is mentioned only as a reminder of the diversity of Western military interventions.)

Following these Western military interventions, both Bosnia and Kosovo became independent Republics with strong Western backing. They remained Muslim or mostly Muslim.

Would anyone dare argue that Western action to stop the massacres of first Bosnians and then Kosovar are responsible for the fact that now almost entirely Muslim Kosovo is currently producing many asylum seekers? I suppose, this is defensible: Had NATO not intervened militarily, Kosovars would been massacred by Milosevic in larger numbers, and then, they would have fewer people, – mathematically available – to contribute as asylum seekers.


Of the asylum applicants from Muslim countries, 45% came from Albania, Eritrea, Pakistan, and Nigeria together, all countries with no US or other Western intervention of any kind in recent years ( I mean since 1950, the earliest I really remember!)

Albania alone contributed more asylum seekers, 33,900, than Iraq and Afghanistan together, 26,700. There have been no US or Western intervention in Albania.

Of course, distance alone makes it easier for Albanians than for Iraqis and for Afghans to reach Germany. But, by the same reasoning, why are there few asylum seekers from Croatia that is even closer to Germany, or from Romania. that isn’t much farther? (Croatia and Romania all have tiny Muslim populations.) Contrary to this line of reasoning, I must say, there were 21,000 asylum seekers from Serbia, a country with a small Muslim minority. Muslim dominated societies do not have a monopoly on severe social pathologies. I never asserted otherwise.

We know from the cut-off point of the table of the ten countries that were the largest suppliers of asylum applicants that the highest possible number of asylum seekers from non-Muslim Croatia, or from Romania (or from non-Muslim Bulgaria, or from troubled Greece) would be 3,976. That would be about 1/10 of asylum seekers from mostly Muslim Albania.

I see in these figures moderate support for the idea of the sickness of Muslim societies. I find little support, on the other hand, for the competing idea that Western and American intervention are responsible for the difficulties those societies are encountering.

I anticipate several criticisms of this provisional conclusion.

First, quantitative association like these don’t “prove” anything. Of course they don’t. Perhaps, there is a third factor, or series of factors not related to either Islam or Western intervention that explain why Muslim societies are such rich providers of asylum seekers. I am listening.

Second, the short recent period January to August 2015, maybe historically unrepresentative. There is a near- infinity of other possible periods the examination of which might show no disproportionate numbers of refugees from Muslim counties. (Ask me why a “near infinity.”)

Third, Germany is not the whole world. A more inclusive data base showing all asylum applications from all countries to all countries might demonstrate no preponderance of refugees from Muslim countries. In fact, such a data base might indicate that refugees from Muslim countries are actually under-represented among asylum seekers world-wide.

I hope someone performs one or the other study. I would easily change my mind according to the results. I am not wedded to the idea of widespread sickness of Muslim societies. Frankly, I don’t even like it. I surely have no ideological investment in this view. It’s just that there is currently no other view that is even modestly supported by anything but ideological intransigence.

Finally, there are probably those who would argue that large numbers leaving their countries at great personal risk to seek refuge in an alien country the language of which they probably don’t even know, that such an exodus says nothing about the countries of origin. Go ahead, say it; make my day! I can’t wait.

The conclusions of this simple analysis is difficult for many otherwise intelligent people to accept, even provisionally. Three reasons that I see for the rejection.

First it seems politically incorrect. We have become so confused by leftists identity politics that many are unable to distinguish between race, an unchanging attribute of a person, and religion, an individual choice. He used to be black; he still is. I used to be a Catholic. I am not anymore. That simple! (Of course, I did not risk the death penalty as do Muslims in some Muslim countries for committing apostasy.)

Second, professional intellectuals – who may or may not be very intelligent – have a horror of being caught believing the same things as do the great unwashed masses. It’s bad enough that they must assent to the assertion that the sun rises in the east, same as a plumber or a cop! The masses are “Islamophobic;” I must stay away regardless of the evidence!

Third, and much more subtly, my discussion with Brandon is part of an ongoing discreet struggle taking place on the edge of the libertarian movement. Libertarians of all stripes believe that war is a major factor in increasing the power and the scope of the state vis-à-vis civil society. (I share this belief.) Libertarian purists like Brandon end up becoming a kind of qualified pacifist, like this:

Perhaps, if I am completely sure that people who have sworn to disembowel me are actually climbing over the back wall of my property after having set my neighbor’s house on fire with my neighbors inside, perhaps, then, I will think of defending myself.

A handful of libertarians of that ilk keep failing to recruit the millions of moderate conservatives who both want small government and believe the yoke of government will never be alleviated in a society that feels threatened. Let me repeat myself: The task of first halting the growth of government and then, of rolling back its scope and power can only be accomplished in a very well defended society. Much of this rolling back has been achieved in Somalia, by the way yet, Somalia is not a model.

In their desire to reject all kinds of war that are not obviously and dangerously defensive, libertarian purists will find fault with all wars, almost at any cost. If necessary, they will blind themselves to the obvious. The act of blaming on American and or Western intervention the self evident multiple failure of Muslim societies (with major exceptions), is just the latest example of this tendency to gauge out one’s own eyes to avoid the horrors of the truth.

“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm. – W. Churchill”

* The data on seekers of asylum from Germany are from the German Federal Office for Migrations and Refugees published in the Wall Street Journal of 9/25/15, p. A12

“Turkish Savagery” is up at Liberty Unbound

For centuries, Europeans viewed the Turk as the most feared, yet least familiar enemy. Twice, the Ottoman hordes threatened Vienna, practically next door to Paris. For hundreds of years French Mediterranean towns and monasteries fortified themselves against Turkish pirates (who mostly never showed up). Algerian pirates, who were thought of generically as “Turks,” occasionally plundered the Irish coast. Once, a bunch of them even raided Iceland! Following his naval debacle at the Bay of Abukir, Napoleon brought Mamelukes, Turkish mercenary troops from Egypt, back to Europe. He used them as a weapon of terror against the insurgent Spaniards, a fact memorialized by Goya in his Tres de Mayo. In this atrocity painting, only the Spanish victims, who seem to be appealing to the viewer, have human faces. The Mameluke execution squad is shown from the rear, like a many-backed beast.

Read the rest.

A Matter of Legitimacy

Dictionaries give us two definitions of “legitimacy”: “the quality of being legal” and “the quality of being reasonable and acceptable”. The two meanings are intertwined: we expect reasonability from the laws and we infer the content of a law we do not properly know from what we regard as reasonable. Unreasonable laws are not acceptable to the people and Cesare Beccaria warned us about how unreasonable prohibitions engender more and new crimes.

Political Realism and Legal Positivism cross their paths when it is time to discuss what is the ultimate foundation of obligation, both political and legal: facts and force. An overwhelming force deployed upon individuals and peoples will always be able to impose what is reasonable and acceptable. For Thomas Hobbes, as fear is not a sufficient reason for annulment of covenants, the feeling of terror from the subject to the sovereign does not challenge the legitimacy of his power.

Libertarianism is, in principle, a political stance on the state that denies its legitimacy or, at least, denies unlimited sovereignty. And we stress “in principle” because we want to point out that not all versions of Libertarianism accomplish the said aims. In this regard, we want to single out one crucial trait of every Libertarian political theory: is it possible a stateless order of cooperative coordination between individual plans? Does its existence depend upon our own volition and agreement? We want to make a distinction between two strains of Libertarianism: the one which affirms the possibility of a stateless society and the one which does not.

Paradoxically, the affirmation of the possibility of a stateless order of cooperation legitimates the Hobbesian stance on unlimited sovereignty: having at their disposal the alternative of a stateless political order, individuals opt freely for a Leviathan. What we have to decide now is the extension of the power of the government, but at this point there is no restriction left to the power of the Leviathan to determine its own limits.

On the other hand, for the strain of Libertarianism that regards the absence of a state as impossible or not desirable ­because, for example, the justice is an artificial virtue that demands a government to enforce it­, the state is a fact that has no reasonable alternatives. As the theft that compels us to choose between our bag or our life, there are no reasonable options left to us but accepting the power of the state. As David Hume pointed out, tacit conventions as the stability of the possessions require a political order to enforce it. Therefore, the factual power of the state will be legit only as long as it enforces the tacit order of human cooperation that allows individuals to fulfil their plans. Notwithstanding this last strain of Libertarianism does not deny the legitimacy of the state, it does consistently deny the legitimacy of any type of unlimited sovereignty.