Month: October 2017

“The Impossibility of a University”

Bill Rein Culture , ,

I was just reading David Friedman’s The Machinery of Freedom. He published the first edition in 1973. Amidst the wild ride of the contemporary American university (Evergreen State College being the most heinous single episode), one passage seems especially prescient.

From chapter twelve in the third edition:

The modern corporate university, public or private, contains an implicit contradiction: it cannot take positions, but it must take positions [sides]. The second makes the demand for a responsible university appealing, intellectually as well as emotionally. The first makes not merely the acceptance of that demand but its very consideration something fundamentally subversive of the university’s proper ends.

It cannot take positions because if it does, the efforts of its members will be diverted from the search for truth to the attempt to control the decision-making process. If it takes a public position on an important matter of controversy, those on each side of the controversy will be tempted to try to keep out new faculty members who hold the other position, in order to be sure that the university makes what they consider the right decision. To hire an incompetent supporter of the other side would be undesirable; to hire a competent one, who might persuade enough faculty members to reverse the university’s stand, catastrophic. Departments in a university that reaches corporate decisions in important matters will tend to become groups of true believers, closed to all who do not share the proper orthodoxy. They so forfeit one of the principal tools in the pursuit of truth — intellectual conflict.

A university must take positions. It is a large corporation with expenditures of tens of millions of dollars and an endowment of hundreds of millions. It must act, and to act it must decide what is true. What causes high crime rates? Should it protect its members by hiring university police or by spending money on neighborhood relations or community organizing? What effect will certain fiscal policies have on the stock market, and thus the university’s endowment? Should the university argue for them? These are issues of professional controversy within the academic community.

A university may proclaim its neutrality, but neutrality as the left quite properly argues, is also a position. If one believes that the election of Ronald Reagan or Teddy Kennedy would be a national tragedy, a tragedy in particular for the university, how can one justify letting the university, with its vast resources of wealth and influence, remain neutral?

The best possible solution within the present university structure has been not neutrality but the ignorance or impotence of the university community. As long as students and faculty do not know that the university is bribing politicians, investing in countries with dictatorial regimes, or whatever, and as long as they have no way of influencing the university’s actions, those acts will not hinder the university in its proper function of pursuing truth, however much good or damage they may do in the outside world. Once the university community realizes that the university does, or can, take actions substantially affecting the outside world and that students and faculty can influence those actions, the game is up.

There is no satisfactory solution to this dilemma within the structure of the present corporate university. In most of the better universities, the faculty has ultimate control. A university run from the outside, by a state government or a self-perpetuating board of trustees, has its own problems. A university can pretend to make no decisions or can pretend that the faculty has no control over them, for a while. Eventually someone will point out exactly what the emperor is wearing.

With an activist culture in place, the university endures more and more blows to its truth-seeking abilities. UC Berkeley spent an estimated $600,000 on security for Ben Shapiro a couple months ago, after the chaos and protests of the past year. Staff cut seating in half, worried that protesters would dismantle chairs and throw them onto the audience on the bottom floor. Now, so I hear, student clubs are having difficulty hosting evening meetings on campus, as the administration makes up for the expenses by cutting down on electricity usage and janitorial services. Club stipends, of course, are down. All of this damages the educational environment.

My friends went to see Ben, and watched a woman with a “Support the First Amendment! Shalom Shapiro!” sign get dragged into a crowd and beat up. (Not reported by major media; falsely reported as a knifing by right-wing media.) David identified the internal problem of the corporate university, which I believe we see escalating; the external problem is when outsiders — most of the violent rioters in Berkeley since the beginning of 2017 — understand the political power of the university and the speech that goes on there, and seek to control the process of intellectual conflict through physical force. Both are advanced in accordance with the political involvement of the students as well as the teachers.

Libertarian sighted at the Daily Beast

Brandon Christensen History, Links , , ,

Ooops, I mean cited, not sighted:

Nor was it the case that there was a direct correlation between Protestant countries and prosperity. In a paper published in the journal Social Forces Jacques Delacroix and Francois Nielsen conclude that “there is little empirical support” for the common interpretation of Weber’s Protestant Work Ethic. This idea probably comes “from selected anecdotal evidence fortified… by the perceived well-being of contemporary Protestant countries.” In other words, Protestantism does not make people rich even if, in some cases, Protestants think that it does.

Rest the rest. h/t Uncle Terry

Oh, and Mark has an essay up on institutions over at Aeon that ties in well with the Daily Beast piece.

Don’t forget about the back-and-forth between Mark and Bruno on the Protestant Reformation here at NOL: Part one (Bruno), part two (Mark), and part three (Bruno).

Catalonia: a philosophical case for Secession

Chhay Lin Lim Liberty, Philosophy, Politics , , , ,

Yesterday, the Catalan government has overwelmingly voted for independence from Spain and to establish an independent republic. 70 were in favour, 10 were against, and 2 votes were blank. Unfortunately, it was rejected by the central governments of Spain and many other countries. Nonetheless, the Catalan case may inspire the other independence movements in Europe.

In this post I’d like to provide a philosophical case for the ethical right of secession based on a libertarian perspective of self-ownership. My argument is exclusively theoretical, although a discussion on how secession could be achieved practically would be interesting as well. I may save that for a post in the future.

Below, you can find a map of other places in Europe with strong secessionist movements:

Structure of my argument

My argument is deductive and runs as follows:

  1. People have the right of self-ownership in accordance with the non-aggression principle, and based on the natural rights philosophy put forward by the political philosopher Murray Rothbard;
  2. If people have the right of self-ownership, they also have the right of voluntary association, voluntary formation of communities, and the right to choose their own leaders;
  3. Sometimes the state that the individual belongs to, violates the rights of the individual to the extent that the individual does not feel associated with it anymore;
  4. Under such circumstances the individual may perceive the state as an unacceptable aggressor, and he is justified to revolt by separating himself from the state. He can form communal associations to secede as a new political unit;
  5. There is no limit to secession. Provinces have the right to secede from a state, a district from the province, a town from the district, a neighbourhood from the town, a household from the neighbourhood, and an individual from the household.

The right of self-ownership and property rights

In For a New Liberty (1973), Murray Rothbard deduces natural law from the essential nature of human beings. He writes that it is in man’s nature to use his mind in order to select values, ends and the means to attain these ends so that he can “act purposively to maintain himself and advance his life”. He furthermore contends that it is absolutely “antihuman” to interfere violently with a man’s “learning and choices” as “it violates the natural law of man’s needs”. Therefore, man’s nature should be protected through his right of self-ownership. This right asserts that man has the absolute right to “own” his body and “to control that body free of coercive interferences”. This right includes the practice of such essential activities as thinking, learning, valuing, and choosing ends and means without any coercion, since such activities are necessary for the enhancement of man’s life.

From this natural right follows the right to do anything with one’s body, including the right to form free associations and communities, and the right not to be violated in one’s self-ownership. Thus, one has the right to associate oneself with the leader of one’s choice, but not the right to impose a leader unto someone else. Likewise, people should be free to join and to leave communities voluntarily.

In addition to the right of free association, people also have property rights. Rothbardian property rights are directly derived from self-ownership rights, and are based on the Lockean homesteading theory. It states that since man owns his person, he owns his labour, and therefore he also owns the fruits thereof. John Locke (1689) has put homesteading theory in the following way:

… every man has a property in his own person. … The labour of his body and the work of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state of nature hath provided and left it in, he hath mixed his labour with it, and joined it to something that is his own, and thereby makes it his property.

Given that man has the right of self-ownership, and that he must employ natural objects for his survival, then the sculptor has the right to own the product he has made through the mixing of his labour. In other words, by producing something with one’s energy through the utilization of unowned nature, one has, as Rothbard calls it, “placed the stamp of his person upon the raw material”. One therefore rightfully owns the product. Any violation of self-ownership and property rights should hence be regarded as an act of aggression.

The state

The state is nonetheless a social institution that has historically interfered most often with people’s self-ownership and property rights. Max Weber has recognized it as an institution with a territorial monopoly of compulsion in his essay ‘Politics as a Vocation’ (1919). Hoppe, in Democracy – the God that failed (2001), asserts that every government will use this monopoly to exploit its citizens in order to increase its wealth and income.

“Hence every government should be expected to have an inherent tendency toward growth”. (Hoppe)

State exploitation happens in the form of expropriation, taxation, and regulation of private property owners. A state at best respects the rights of individual sovereignty and private property, but because its functioning is dependent on the expropriation of its citizens’ wealth there is a natural conflict between the state and its citizens. According to Franz Oppenheimer (1908), the state can impossibly finance itself without its productive citizens. It can only take that what has already been produced, and therefore it can only exist as a result of the “economic means”. However, this confiscation often involves state violence and aggression as nearly no one is willing to give up on his property voluntarily.

Under such circumstances, it is understandable that conflicts may arise between citizens and the state; sometimes resulting in citizens’ feelings of dissociation from their governments.

Secession

Frédérik Bastiat maintains in The Law (1850) that if everyone has the right to “his person, his liberty, and his property”, then

“a number of men have the right to combine together to extend, to organize a common force to provide regularly for this defense.”

Following Bastiat’s reasoning, I believe that citizens who feel dissociated can then revolt and opt for secession as a form of self-defense against state aggression on their self-ownership and property. Any state that does not recognize its citizens’ rights of secession does not sufficiently recognize the sovereignty of its people. Secession is a powerful means of political action to show the people’s discontent with their leaders. If secession would be impermissible, then the people who want to disassociate themselves from the state have the following three options:
(1) continue living under the oppressive state rule;
or (2) revolt against the state;
or (3) emigrate to another state.

By doing (1), the people continue living under perpetual state aggression, and their sovereignty is continually violated.

If the people choose option (2), then there will be severe and costly consequences which can involve war and destruction of private property. In addition, there are also no guarantees that the revolt against the state will be successful. For these two reasons, this option seems to most secessionists to be the least preferable of the three.

The people can alternatively choose (3) and emigrate to another state. This alternative is often used as an argument against secession under the presumption that those who are unhappy within one particular state, should simply emigrate. However, the cost of emigration can be so significantly high that it is unfeasible. One has for example the costs of finding information on the procedure of emigration, becoming accepted by the other state, finding a new workplace etc… The state can also exert barriers of emigration through tedious bureaucratic processes and passport controls, which makes emigration even more unattractive.

Who are morally justified to secede?

Following man’s right of free association, the answer should be: anyone, as long as it happens on a voluntary basis. Even though most secessionist movements are built on a common ethnicity or common cultural heritage, such precepts are not necessary to justify secession. Moreover, secessionists should not be prescribed any form of social organization as they should be free to choose their own form of government. This means that a multitude of social organizations are possible, including those that are currently non-existent. By being epistemologically modest of what governmental form is best, communities are allowed to experiment and find their own form of government. This will eventually add to our understanding of human social organizations.

Lastly, it is important to note that if secession is ethical, ultimately based on the principle of self-ownership, then it follows that the individual has the right to secede as well.

This right cannot be exclusively granted to groups, because only individuals can have ownership of their own bodies. Self-ownership cannot be shared, just like the mind cannot be shared. The mind is an attribute, inherent only to individuals, and collectives only derive their rights from the rights of their individual members. Therefore the right of self-ownership must necessarily imply the right to practice unlimited secession.

As Rothbard would assert, provinces should have the right to secede from a state, a district from the province, a town from the district, a neighbourhood from the town, a household from the neighbourhood, and an individual from the household. This logical consequence is anarchism.

Conclusion

In setting forward a natural rights defense of self-ownership, I have concluded that individuals have the right to free association and property rights. Unfortunately, states sometimes violate these rights to the extent that its people do not want to be associated with their state anymore. Under such circumstances they retain the right to secede. Secession should however not only be limited to communities. Single individuals also bear the right to secede, since only individuals can possess self-ownership, and since groups can only derive their rights from its individual members.

A long read

Rick Weber History, Links , , , ,

According to Instapaper this article at Wait But Why is a “139 minute read.” And it was time well spent.

It’s about a new Elon Musk venture, Neuralink, but there’s plenty non-Musk stuff in there of interest. I’m agnostic on whether Elon Musk is or isn’t the next coming of the (anti-) Christ. What’s really interesting is the background material this article gives, building up a highly entertaining natural history of knowledge. The section below really captures the main thrust of that story, but it’s worth reading anyways.

minimal tribal knowledge growth before language

And this:

That leads into a discussion of how brains work, that “soft pudding you could scoop with a spoon.” Here are some excerpts:

I’m pretty sure that gaining control over your limbic system is both the definition of maturity and the core human struggle. It’s not that we would be better off without our limbic systems—limbic systems are half of what makes us distinctly human, and most of the fun of life is related to emotions and/or fulfilling your animal needs—it’s just that your limbic system doesn’t get that you live in a civilization, and if you let it run your life too much, it’ll quickly ruin your life.

And…

Which leads us to the creepiest diagram of this post: the homunculus.

The homunculus, created by pioneer neurosurgeon Wilder Penfield, visually displays how the motor and somatosensory cortices are mapped. The larger the body part in the diagram, the more of the cortex is dedicated to its movement or sense of touch. A couple interesting things about this:

First, it’s amazing that more of your brain is dedicated to the movement and feeling of your face and hands than to the rest of your body combined. This makes sense though—you need to make incredibly nuanced facial expressions and your hands need to be unbelievably dexterous, while the rest of your body—your shoulder, your knee, your back—can move and feel things much more crudely. This is why people can play the piano with their fingers but not with their toes.

Second, it’s interesting how the two cortices are basically dedicated to the same body parts, in the same proportions. I never really thought about the fact that the same parts of your body you need to have a lot of movement control over tend to also be the most sensitive to touch.

Finally, I came across this shit and I’ve been living with it ever since—so now you have to too. A 3-dimensional homunculus man.17

This is too far outside my area of specialization to say, but it’s certainly an entertaining read that seems to fit with what I know about these topics (although the section on neurology could be made up as far as I know).

From there it builds up to the moon shot idea Musk apparently has in mind: building the core technology for a high bandwidth mind-computer interface. This would be the ultimate logical extreme of a trend towards better interfaces that’s been going on since before punch cards. If you think over the natural history of knowledge, it becomes clear that this idea is ultimately just a few dozen steps further down a path we’ve been on for billions of years.

And the implications of taking it that far are profound. The pros and cons of that power are huge. Consider how much more powerful your brain is with paper and pencil than without. Or a computer. Or a computer with a GUI and a copy of Excel. Once you can plug into your computer Matrix-style, all those awesome hot keys that let you zip through your computer like a pro will be like roller skates next to a rocket sled. And the two-way link would mean we could genuinely exercise some self control… for example,  by running a computer program that zaps you when you eat too much chocolate cake.

Readers of this blog will hear Hayek warning you! Such a device gives you a lot of power to manipulate a complicated thing in ways we may never be able to understand.

But this type of personal power might be a necessary bulwark against government or corporate power. Network externalities have already locked us in to Google and Facebook. A Byzantine government has created rent-seeking opportunities that puts enormous power in the hands of the politically connected. The NSA is terrifying. And machine learning will continue to get better, giving those entrenched players even more ability to understand and manipulate large numbers of people. (I’m not endorsing this forecast, just listing it as a possibility.)

In any case, even if Neuralink is just an April Fool’s joke I missed out on till now, this article provides a theory of knowledge that’s well worth reading.

In the near future I’ll argue why you need such a theory of knowledge. Stay tuned.

Lunchtime Links

Brandon Christensen Links , , , , , , , , , , , , , , , , , , , , , , ,
  1. oil and Kurdistan
  2. after Raqqa, Iraq’s army turns on Kurdistan
  3. “There has been a common and unfortunate tendency among many analysts and policy makers to underestimate the strength of Iraqi nationalism”
  4. separatist movements in Europe don’t actually want independence
  5. GREAT topic, but poor methodology, poor theory, poor use of data, and bad faith
  6. meh (try this book review instead)
  7. Law without the State [pdf]

A quick rant on NY’s Excelsior Scholarship

Rick Weber Economics, Liberty, Politics , ,

Long Island Business News had a cover story last week: “Free for all?”

And the answer is no.

NoL readers don’t need to be reminded that there ain’t no such thing as a free lunch. But I want to focus on the “for all” aspect. And the answer there is also no. This is a program that benefits the middle class and simply won’t be available for the poorest kids in the state.

There are a lot of different programs for paying for schooling costs, and I don’t want to get bogged down in specifics. So here’s (roughly) how this new program works: full time students whose family income is below (approximately) the 75th percentile get more money for school. That money goes away if they stop meeting those criteria.

This is not going to be helpful to poor students who don’t have to resources necessary to go to school full time. It sounds inclusive, but they might as well make the income requirement family income between the 60th and 75th percentile.

In the best case scenario, we might end up getting a positive return on this program (generating more tax revenues from more productive workers). But we still have to ask about what alternatives were possible.

Here are three problems with that outcome:

  1. If those kids were going to go to school anyways, then we’re just creating a common pool problem where costs and benefits aren’t compared by the relevant decision makers.
  2. If some of those kids weren’t going to go to school otherwise, then we’ve increased the pressure on poor kids to get a college degree without helping them out. And if we’re thinking of this like an investment, the returns would be higher on getting more poor kids to go through school.
  3. If this program doesn’t have a return on investment high enough to offset the costs, then that budget line has to compete with some other program (tax returns would be nice, or investment in infrastructure, or something else).

I don’t expect any legislation to solve the problem once and for all. But this program is more likely to make the underlying problems worse, at the expense of poor people, and with little net gain. Not only is this bad economics, it’s not even in line with the more honorable goals of progressives. It’s simply a way for politicians to buy votes with other people’s money.

On Nancy MacLean’s Thesis

Nicolas Cachanosky Books, Current Events, History , ,

Nancy MacLean’s Democracy in Chains continues to yield surprises. Just a few days ago, Phil Magness now shows a “typo” that plays a significant role in MacLean’s thesis.

Despite all these detailed scrutiny of her work, it is not clear that MacLean understand the type of error is being pointed out about her book. There are two types of errors regarding a thesis: (1) the thesis is correctly defined, but the proof is flawed, or (2) the thesis is incorrectly defined, in which case there is no need to test the thesis. What MacLean and her supporters don’t seem to realize is that Democracy in Chains is built on the second error, not on the first one. Instead of ignoring her critics, MacLean should be up to the academic game and engage accordingly. Her behavior is very telling. If her research is so solid, what’s the problem?

Consider he following example. Let’s say you find a book built on the thesis that Milton Friedman was a french communist who lived in the 18th century. You don’t need to read this book to know that the author is wrong on her argument. This book on Friedman is both factually (Friedman did not live in the 18th century and was not French) and theoretically (Friedman was not a communist) wrong. This is how wrong MacLean’s thesis on Buchanan is for anyone with some minimal exposure to his work and Public Choice.

There a few reasons why someone would still read Democracy in Chains. For instance, if the book is a preach to the choir To try to understand how such a misguided thesis can actually be supported by by an author with so little knowledge and expertise on Buchanan and Public Choice. Etc. But a reason why MacLean thinks that their critics are unwilling to consider her thesis is because she is unaware her error is the second one mentioned above. Her thesis is just wrong from the go.

White Supremacists

Jacques Delacroix Current Events, Politics , , , , , , , ,

“White supremacy” has become a central part of the left’s narrative. In an hour and a half of casual news watching on television in early October 2017, for example, I heard three references to white supremacy. That’s more than I did in the decade 2005 to 2015, I believe.

One utterance came from the sports channel ESPN’s African-American commentator Jemele Hill who called president Trump a “white supremacist.” She added that he surrounded himself with white supremacists. Perhaps, by implication of the term “surround,” she meant several millions of his 63 million voters, or even all of them. This kind of verbal hysteria is not new and neither are intemperate television commentators but, in the recent past, such breathless declarations would have been laughed out of the park or negatively sanctioned, or both. Not anymore. Ms Hill’s statement was not exactly an isolated incident either.

In the first two weeks of October 2017, I hear the word “supremacist” on radio or television at least once a day. I am sure it has not happened before in my fifty years in this country (as an immigrant). This new tolerance makes some sense in political context.

For the inconsolable of Pres. Trump’s election, I suspect – but I don’t know for a fact – that the claim is by way of passing the baton at a time when the investigation on “Russian collusion” to elect him, now in its thirteenth month, is going nowhere. If he did not betray the country, what can we accuse him of that’s difficult for decent minded people to forgive, they ask? Digging into this country’s complex and troubled past is always a good bet if you are looking for dirt to throw at an American.

Mr Trump’s own intemperate comments – although never directed at the usual African-Americans targets of real supremacists – helped identify a valuable, superficially semi-plausible charge. The sudden emergence in the collective consciousness of unhappy young white Americans on the occasion of the 2016 election also contributed. (“…in the collective consciousness…;” they were around before that.) Unhappy young whites can but with little effort be turned into the racist rednecks of countless movies. Thus, the white supremacy narrative may be part of a half-blind collective endeavor to discredit for the long term the social forces thought to be associated with the sensational defeat in 2016 of a moderate liberal (and a feminist to boot; more on this below).

My first impression of the reality of a white supremacist movement, based on reading and listening to radio – including National Public Radio – about five days a week, besides watching television, is that there isn’t actually much going on nationwide in this respect. Yet, I am mindful of the fact that I live in “progressive” Santa Cruz, in liberal California. In neither place would one expect to bump casually into white supremacists. And if there were one, he would probably just clench his teeth and keep his mouth shut. In lily-white Santa Cruz, on the contrary, a black supremacist would probably be elected mayor on the first try without really campaigning. (OK, I may be exaggerating a little, here.)

I realize also that my reading habits as a conservative may not lead to chance encounters with supremacist tripe.* So, I wonder: What’s the actual situation? To try and explore this question more deeply, I use a two-step strategy. I look first for existing credible empirical reports on the topic. Second, I look for what should be the products of white supremacist groups, the tracks they should logically be expected to leave on the internet and elsewhere. But first, a brief historical detour. Continue reading →

Markets for Secrets?

Ash Navabi Economics, Liberty , ,

In a world without intellectual property, would it be possible to buy and sell secrets? I suggest the answer is yes. In this post, I provide both a theoretical framework for such markets, as well as pointing to real life examples of such markets already existing.

Introduction

In a previous post, we talked about why information is the only public good. But of course, it’s possible to keep information private. Such private information is called a secret. Currently, entrepreneurs and inventors have two choices when they have what they believe is a profitable secret: they can either keep recipe, industrial process, or so on, a secret, and be protected by “trade secret” laws; or they can “publicize” their secret in exchange for a patent (which they can use to either issue injunctions against competitors or to extract royalties).

But there has been a lot of economics literature in recent years that challenges the status of intellectual property (IP). Most famously, there is Michele Boldrin and David K. Levine’s book Against Intellectual Monopoly, where they detail both an empirical and theoretical case against the economics of intellectual property. Furthermore, patent lawyer Stephan Kinsella’s book Against Intellectual Property gives a principled legal and ethical case against IP.

Continue reading →

How fast does populism destroy economic freedom in Latin America?

Nicolas Cachanosky Economics, Liberty , , , ,

The turn of the twentieth century has seen an increase in populist government in Latin America. That populism is no friend of free markets is well known. And even if their movement against free markets if fairly quick, it is common for individuals to loose track of how fast they are loosing their economic freedoms.

There are five cases of populist governments in Latin America that can work as benchmarks for the region. In particular, we can look at the behavior of governments in Argentina, Bolivia, Brazil, Ecuador, and Venezuela for the time frames depicted in the following table.

Table 1

During this time period, populist governments failed to increase GDP per capita consistently faster than the region. The only exception is Argentina. But its fast increase in GDP is largely explained as recovery after the 2001 crisis and by consuming capital stock, not as an expansion of potential output. It is no accident that Argentina met stagflation in 2007. In the last three issues of the Economic Freedom of the World (Fraser Institute) Argentina ranks among the bottom 10 free economies in the world.

The following figure shows the fall in ranking of each country in the Economic Freedom of the World.

Figure 1

We can translate the information shown in the above into loss of ranking position per year of populist government. This is what is shown in the next table.

Table 2

This table offers a few readings:

  1. Argentina is the country that fall in the ranking of economic faster than its peers.
  2. Ecuador shows a very slow fall. This is due to two reasons: (1) Ecuador already starts from a low ranking position. (2) The last year of the index (2015) shows an improvement (without this improvement the fall is quite sharp as well.) Ecuador does not represent a case of “good populism.”

What this table is showing is that if an individual is born in any of these countries ranking 1st in economic freedom the same year a populist government takes office, then the same country will rank at the bottom of the world before he retires. In the case of Argentina, in 27.8 years the country will be at the bottom of the list, this means that by the time this individual starts to work, Argentina will already have a very repressed economy. By retiring time, this individual will have no experience of living and working in a free economy.

This numbers are not just descriptive of populism in Latin American countries. They also serve as a sort of warning for Europe and the United States, regions that have already seen some signs of populist behavior in their governments and political groups in the last few years. Populism can be emotionally attractive, but is very dangerous for our economic freedoms.

Physical Goods, Immaterial Goods, and Public Goods

Ash Navabi Economics , , , ,

Public goods in economics have been a contentious theoretical issue since Paul Samuelson introduced the concept in 1954. The main sources of contention are what real world things are public goods, and who should provide them. In this post I propose a new way of looking at goods that will shed light on why public goods have posed such a problem. In particular, I propose that there is an important distinction between physical goods and immaterial goods; that public goods can only be immaterial goods; and that this unique feature of public goods does not preclude the market to provide the “socially optimal level.

Introduction

Economists define a public good as something that is “non-rival” (meaning that one person’s consumption does not affect another person’s), and “non-excludable” (meaning that one person cannot stop another person from consuming the good.) Public goods are often contrasted with private goods, which are rival and excludable.

The implications are that public goods cannot be provided by a free market, because no one would have to pay for such a good, and so there would be so incentive to produce it. Therefore, the argument goes, the government ought to provide public goods.

Features_of_goods

An example of a private good is an apple. Imagine a world with just you, me, and an apple. If I take a bite out of the apple, there is now less apple for you to consume. That means it’s rival. If I put the apple in a locker to which only I know the combination, then again you are prevented from consuming the apple. This makes it excludable.  Continue reading →

Sunday reading: Bertrand Russell

Bill Rein Philosophy , ,

We have a lot of fresh faces in my philosophy club this semester. On one hand, the new perspectives remind our old heads about some of the basic questions we studied when we first arrived at university, and it’s nice to introduce new students to philosophy; on the other, it makes us behave like a wolf pack, moving at the pace of the slowest member. Sometimes, I want to be an elitist and focus on more complex areas, utilizing the knowledge of our most experienced members. This would mean we lose all of our new members. Ultimately, semester after semester, keeping a high membership (and keeping students participating) always proves to be more important.

This fall I assigned Bertrand Russell’s Problems of Philosophy, as an easy intro text. As he introduces ideas, he injects his own interpretations and potential solutions, and I find I usually disagree with him. However, Russell is great at moving between analytic argument and simple, digestible prose, so I started seeking his other writing out, as one of the canonical popularizers. Here is an essay I thought I’d share, on his meeting with Lenin, Trotsky and Maksim Gorky, when, as a self-identified Communist seeking out the new post-capitalist order, he inadvertently ended up completely disillusioned with the “Bolshevik religion.” He would publish The Practice and Theory of Bolshevism shortly after in 1920, condemning the historical materialist philosophy and system he saw just three years after the October Revolution.

Russell remained somewhere between a social democrat and a democratic socialist throughout his life (e.g., his 1932 “In Praise of Idleness” on libcom.org), but a vocal critic of Soviet repression. He was also a devout pacifist, which explains his early infatuation with the Russian political party which advocated an end to WWI. He died of influenza in 1970 after appealing to the United Nations to investigate the Pentagon for war crimes in South Vietnam.

From his article on meeting Lenin:

Perhaps love of liberty is incompatible with wholehearted belief in a panacea for all human ills. If so, I cannot but rejoice in the skeptical temper of the Western world. I went to Russia believing myself a communist; but contact with those who have no doubts has intensified a thousandfold my own doubts, not only of communism, but of every creed so firmly held that for its sake men are willing to inflict widespread misery.

On the Difference between Hayek’s Road to Serfdom and Increasing Central Planning

Federico Sosa Valle Books , , , ,

Once, in another place, I had pointed out the misunderstandings of the common interpretation of Hayek’s road to serfdom thesis. This was not an unintended process by which government intervention on markets inevitably leads to further and increasing interventions. That might be Ludwig v. Mises’ thesis, but not Hayek’s.

What Hayek stated in The Road to Serfdom was that the checks- and-balances system of modern constitutionalism appears as an obstacle to the quick achievement of the concrete ends that an interventionist policy aims for. Thus, the road to serfdom is an unintended process by which legal constitutional processes are eroded by decisions based on expediency.

On that occasion it was left pending to solve the question of where the confusion on the central thesis of “The Road to Serfdom” came from.

The source of the answer to this question is yet Ludwig v. Mises. The Road to Serfdom was first published in 1944, but, previously, in essays published in 1935, we find Hayek, still heavily influenced by L. v. Mises, stating opinions that are very similar to the common confusion about the meaning of the road to serfdom: “In fact, however, if by planning is meant the actual direction of productive activity by authoritative prescription to be used, or the prices to be fixed, it can be easily shown, not that such a thing is impossible, but that any isolated measure of this sort will cause reactions which will defeat its own end, and that any attempt to act consistently will necessitate further and further measures of control until all economic activity is brought under one central authority” (“Socialist Calculation I: The Nature and History of the Problem”, first published in Collectivist Economic Planning, London,  1935, and reprinted in Individualism and Economic Order, Chicago, 1948).

F. A. Hayek did not change his opinions of 1935 in The Road to Serfdom (1944), he just shifted the realm of his inquiry from economics to political philosophy. Nevertheless, it would be a crass error to judge Hayek’s political and legal theory -for good or for bad- using his former opinions as an economist.

Lunchtime Links

Brandon Christensen Links , , , , , , , , , , , , , , , , ,
  1. Interview with a secessionist
  2. Ducking questions about capitalism
  3. The perverse seductiveness of Fernando Pessoa
  4. “Yet in this simple task, a doffer in the USA doffed 6 times as much per hour as an adult Indian doffer.”
  5. Conflicted thoughts on women in medicine
  6. The Devil You Know vs The Market For Lemons (car problems)