Year: 2015

To Pledge or Not to Pledge

Warren Gibson Culture, Current Events, Liberty, Politics

I attended a public meeting last night as I do from time to time. It’s a bad habit I can’t seem to shake. Like many of the more formal public meetings in this country, it started with the Pledge of Allegiance. (Foreign readers may not know that this is a 31-word quasi loyalty oath of allegiance to “the flag.”) When the time comes, everyone is supposed to stand, put their heart on their hand, face the flag, and recite the Pledge in unison, which is drummed into all schoolchildren.

My policy during the last several years has been to stand and remain silent with my hands at my side. I don’t make a spectacle of myself by staying seated, but I’m not willing to say the Pledge, for several reasons.

  • It’s too much like religion, and not just because of the “Under God” phrase
  • I don’t like feeling like a sheep following the herd
  • I don’t like the implication that we should bow and scrape to our rulers

Plenty of people would brand me a traitor for my attitude, an ingrate who doesn’t appreciate the benefits of living in the good ol’ U.S.A. In fact, I am quite grateful that I live in the U.S.A. because

  • I grew up in this culture and feel a part of it (omitting rock “music”)
  • The land is beautiful
  • Our politicians are less rapacious than in some other countries
  • We still have a reservoir of individualist sentiment that resists the “Progressives” and the neocons and their relentless push for a made-in-America brand of fascism
  • The libertarian movement has grown enormously in the years since 1971 when I signed on

I do indeed feel some kind of loyalty to the land and the people. But not to the government. And to swear allegiance to the Constitution, as the newly elected councilmen did last night, is a farce because the Constitution was shredded years ago, starting with Abraham Lincoln and perhaps earlier. At the federal level, they swear allegiance to the Constitution and then turn around and spit on it.

But wait, you might say, if you’re loyal to the people you have to be loyal to the government because we elect our leaders. But that’s a slender thread indeed. The government is controlled by unelected bureaucrats and powerful special interests. The government is not “the people.”

So, with only the mildest misgivings, I’ll go on boycotting the Pledge.

From the Comments: Why did Cambodians trade foreign terror for domestic horror?

Brandon Christensen Comments, Culture , , , , ,

John Cyberome pitches the question to Chhay Lin on his post about the terrorist attacks in Paris. Chhay Lin’s response (which I have broken up into smaller paragraphs) deserves a closer look:

I don’t understand why Cambodians traded foreign terror for native horror. It’s something I’ve always wanted to understand. I don’t remember a time when I did not have such questions as: how can people be so cruel to each other or would they (the friends I had) be able to commit such horrendous acts to me if they would live during the Khmer Rouge period? It seems like there is a terrible part of human nature that is called upon in certain circumstances. I think the Milgram Experiment and the Stanford Prison Experiment have been examples of how peaceful people can move to extremely horrifying acts. I also think that the Khmer Rouge had good intentions. In their eyes, they were saving the nation from corruption, from immorality, from foreign invaders and from domestic traitors.

Cambodia by the way, is a country that is quite paranoid. Until this day, they still fear that the Thai or the Vietnamese will one day take over the country. Some already believe that the country only exists by name, but that it’s actually under Vietnamese rule. According to them, after the Vietnamese occupation from 1979-1989, they have installed a pro-Vietnamese ‘puppet’. This paranoia feeds nationalism – a sentiment, I believe, that can be easily manipulated into hatred towards foreign Khmer like Sino-khmer or Vietnamese-khmer.

Besides that, I also think that the poorer people were envious of the wealthy class. When the Khmer Rouge came into power and turned the social hierarchy upside down by installing the poor people into higher social positions, they may have been especially cruel to those fellow Cambodians who they believed were better off.

I also think that we can partly blame it on the Cambodian culture. The culture is very hierarchical. People of status look down on poorer people and treat them like crap. The poor don’t even dare to look the better-off in their eyes. It’s a culture that breeds envy and discontents between classes. I think these are a few reasons why the Cambodians had traded foreign terror for native horror. In all honesty, I find the culture quite backward 😛.

This is a whole lotta insight packed into one short ‘comment’.

For starters, I would be comfortable in suggesting that land is the crucial factor of production in Cambodia, rather than capital. (I am not as confident as Rick in arguing that land, labor, and capital are basically obsolete tools, in large part because there are big swathes of the world that don’t share the institutions that have created the West.) Land-based societies that I have read about all share the same general cultural characteristics as those mentioned by Chhay Lin (though none would dare call these characteristics ‘backward’!).

Trade has, in my reading of history, been the traditional arbiter of destruction for land-based interests. Does anybody have any good information on international trade and Cambodia? I’ve looked in to a few sources (World Bank, OECD, Heritage) and it looks like the volume of trade has been increasing since at least 2010, but that there are institutional problems which have yet to be addressed.

‘Creative destruction’ is such a strange concept, especially to a libertarian like me.

Which countries are of US interest?

Michelangelo Landgrave Liberty , , , , , , ,

I was reading my news stream when I noted a blog post from the Cato Institute discussing the silliness of adding Montenegro to NATO. I don’t disagree per se. I certainly don’t see the value of adding Montenegro to NATO, if the purpose of NATO is to protect the US. Nor do I disagree with the general US-libertarian belief that the US has over extended itself in terms of military alliances.

I do wonder though what countries US-libertarians should desire to maintain a military alliance with. A North American military alliance, ranging from Canada to Panama and including the Caribbean, makes sense to me. The Atlantic and Pacific Oceans are our greatest defenses, but I welcome military cooperation from our geographical neighbors.

Beyond there though it gets tricky. Western Europe is certainly rich enough to protect itself. The main reason I am hesitant to leave NATO altogether is the nuclear question. France and the UK are the only European powers with nuclear weapons, but several others are part of NATO’s nuclear sharing program. Should the US leave NATO would these countries seek nuclear weapons for themselves? Would the UK/France provide substitute weapons? Ending military ties with Europe would likely be the easiest option in terms of cutting down on allies.

Japan and South Korea are likewise rich countries, but here too the nuclear question arises. Japan has a cultural aversion to nuclear weapons that I do not see it overcoming in the foreseeable future. South Korea may be willing to use nuclear weapons, but its strained historical relationship with Japan leaves me concerned about the future possibility of a Korean-Japanese alliance to counterweight China PRC. I believe that Japan should be encouraged to modify its constitution to allow its military greater freedom in action and to consider acquiring nuclear weapons of its own. Other nations in the region, such as the Philippines, are outmatched in conventional weaponry or, in the case of Australia, too far away geographically to be of much use in restraining China PRC’s influence in east Asia.

I am hopeful that within my lifetime China PRC will transition to a liberal democracy, but till then I am skeptical about allowing it free reign in east Asia. For the foreseeable future it is hard for me to consider an east Asia without a significant role for the US. Nor would I be particularly against offering South Korea and/or Japan statehood in a United States of the Pacific.

Thoughts? I admit that international politics is not my area of expertise and I more than welcome other’s thoughts on the matter. I also admit that I am not viewing these issues from a pure libertarian perspective but with a splash of nationalism.

As readers may know our own Brandon is playing around with creating a NOL foreign policy quiz similar to the Nolan libertarian quiz.

Good Health Will End Civilization

Rick Weber Culture , , , ,

Good health and decisive minds. With maybe about 5% probability. We’re far more likely to destroy ourselves with war or stupidity, but knowledge could do us in too.

The basic problem is that as our knowledge of health and aging increases, we’re going to end with a lot of old people around. We’re going to be those old people, which is great for us, but it could be deadly in the long run.

Institutions are made up of formal rules, and informal interpretations of those rules by members of society. We learn how to interpret our environment by observing how our predecessors did so, copying them, ideally refining their approach, occasionally rebelling against the old ways and finally pushing our ways on the next generation.

This sets up an evolutionary process where variation and generational turnover occur together. The basic problem is that few people change their minds once they’re about 25. You might be able to teach an old dog new tricks, but odds are good you can’t teach him a new way of looking at the world.

Yeah, some people can change with the times, but on the whole Bill Burr’s pretty much spot on: [as far as other people are concerned] you can live too long. The older the median voter, the further removed their view of the world is from the actual reality of the time.

Now, there’s certainly some optimal degree of conservatism. We don’t want to upend society every five years in the name of progress. But if generational turnover grinds down to a glacial pace, so may institutional adaptation.

But of course we don’t know what the future holds. Perhaps an older, wiser median voter is a good thing. Perhaps the key to longer lifespans includes therapy to stimulate neural plasticity.

In any case, I hope that coming generations will hear a message that mirrors advice given to my generation. We were told “don’t expect to have the same job forever.” Now we need to be told “don’t expect to have the same opinion forever.”

Fretting over Christmas gifts?

Brandon Christensen Books , , ,

Fret no longer! Dr Amburgey smugly reports:

My daughter is a political science major at Queen’s University. She’s putting together her applications for grad school right now [she’s interested in political theory]. Last summer she went to a Libertarian student conference in Montreal [I enthusiastically funded her travel]. At any rate I was doing my annual struggle to come up with good Christmas presents when a visual cue from NOL made the proverbial light bulb light up. She will be tickled when she discovers that Santa Claus gave her a copy of Degrees of Freedom: Liberal Political Philosophy and Ideology by Edwin van de Haar. 😀

I hope I don’t spoil anything here! If political philosophy isn’t your target’s cup of tea, there are plenty of other books by the Notewriters to check out in the book pile to your right (Dr Gibson’s new book comes out in January, but that’s no excuse not to pre-order it now!).

I realize, too, that there’s a way to work with amazon so that when you buy a Notewriter’s book from an NOL account a portion of the money goes back to us (meaning me), or something like that, but I’m lazy and this is a labor of love. Lazy love is the best kind of love.

Happy Holidays.

My Publishing Adventure

Warren Gibson Books

As you see in the right-hand column, I am co-author of a new book, “The World’s Your Stage.” The intended audience is performing artists (musicians, dancers, etc.) and those who manage artistic groups. So it isn’t directly related to this blog, and in fact my co-authors are not libertarians. But readers who are thinking of publishing may be interested in what I learned from dealing with a commercial publisher, so I’ll write a little about those experiences here.

A great deal more is involved in getting a decent book out the door than writing and editing. Most would-be authors know (I hope) that a good editor is essential. Our first editor did a poor job and was fired, at which point the publisher, perhaps out of embarrassment, assigned their top editor to us. He was very helpful. Some editorial corrections can be very hard to swallow. One has to give a great deal of latitude to an experienced editor, while knowing when to stand firm on an essential point.

It had all started with a contract. They sent us a long document that we had to initial in about forty places. We were promised an advance, which showed up about a year after we signed the contract: $5,000 split three ways. I expect to see little or nothing beyond that, making this very much a labor of love. A learning experience, certainly.

They want you to conform to their specifications for writing the document in MS Word (font, spacing, figures, etc.). No problem there.

Publishers are scared silly about copyright infringement. For example, I had used a 52-word quote from a book, but they said I would either have to cut it to 49 words or get written permission from the author. I cut it to exactly 49. There were lots of other places where we did have to get permission. Fortunately one of my co-authors had the patience to get most of these.

They are also picky about citations. In several instances they wanted sources for facts that I thought were common knowledge.

Several times I thought we were through with revisions only to find out we weren’t. After the editor comes a copy editor whose job (I think) is to read it all for consistency and various other picky but necessary things. These good people don’t miss a thing.

A good cover is essential, and for that they have graphic designers who sent us proofs for our approval. A dramatic pictorial graphic would have been nice but beyond the budget, no doubt. They needed photos of us for the jacket along with the photographer’s name, for credit. Mine was a selfie, which had them scratching their heads at first.

Quite a few competent professionals seem to have spent time on our book, and they don’t come cheap, especially when the publisher is headquartered in Manhattan.

So the book is in print and we’re done, right? Not exactly. For a niche book like ours, marketing is pretty much up to us. So one co-author is working on a web page, and we’re all thinking of where and how we might pitch the book. The other co-author was head of public TV in New York for 20 years and there are lots of doors he can open. He got Rene Fleming, an opera star, to write a plug for the back cover. He can easily get speaking gigs and possibly TV appearances.

Now I’m thinking about my next book. Even with this first book in hand, getting a publisher for the second is a long shot so I’m looking at self-publishing. I think there’s a lot I could do on my own, using my experience from the first book, and a lot where I would need help. I would hire an editor, but how to find a good one? And a graphic designer—who? How to market it? Stay tuned.

From the Comments: So what should the US do with Syrian refugees?

Brandon Christensen Comments, Current Events , , , , , ,

There have been a number of excellent discussions in the ‘comments’ threads recently. I have been following them all, but I’m trying to space out, for beauty’s sweet sake, what I think are especially good insights here (my fellow Notewriters are welcome to do the same).

Dr Khawaja’s answer to Dr Delacroix’s question about what he would do “with respect to the Syrian refugees coming to this country” is worth another look:

I would do exactly what the Obama Administration is doing. Let the Syrian refugees in, vet them, and accept the risks. I more or less said that in one of the links I posted [here – BC]. Here’s the vetting procedure, by the way:

http://time.com/4116619/syrian-refugees-screening-process/

I haven’t heard anyone explain what’s wrong with it. Its rigor far exceeds anything applied to student visas or tourist visas.

As for the “Zionist extremists who helped during the war of independence,” the Irgun and Lehi were by all accounts terrorist organizations. They began a campaign of terror well before the war of independence. Their doing so was instrumental to bringing about the mass exodus of Palestinians from what was to become Israel. The Irgun was led by Menachem Begin, who was later to become Prime Minister of Israel. In other words, Israel was not only founded by terrorists, but the Israelis had no compunction electing the self same terrorists to lead their country in subsequent years (Shamir and Sharon being the other two).

I don’t know where you get the idea that “the Jews that the US failed to take in before WWII were German Jews.” Why couldn’t they have been, say, Polish or Russian? And where is the difficulty in imagining militantly communist or fascist Polish or Russian Jews?

“I think it’s not difficult separating Muslims from Christians. Boko Haram does it all the time.”

Well, if we’re going to use arguments like that, why don’t I just say that it’s not difficult separating terrorists from non-terrorists. The TSA does it all the time. Now, if you’d like to propose that we start hiring members of Boko Haram for positions in the TSA, I’m skeptical, but all ears.

I should point out that in one of the posts I pasted up there, I was the one pointing out to someone at my blog that there is no eliminating the risks if we allow the Syrian refugees in. The risks are ineliminable. But I live in the New York City area. I go in to Manhattan whenever I get the chance. If there is a terrorist attack, it’s likely to take place right here. It’s not as though I’m merely imposing risks on other people and cowering somewhere else in safety.

Well? Is the vetting process as it stands good enough? Without reading the link Dr Khawaja provided, I feel confident claiming that it is. Violent criminals shouldn’t be allowed into this country (unless the crimes were committed a long, long time ago), of course. Sex offenders is too tricky a topic to deal with right now (think about getting in trouble for mooning in Russia or something like that), but if the crimes weren’t violent I’d opt for a let ’em in and wait approach. Terrorists of the Islamist variety that come from failed Arab states tend to be good boys at home. What about people with military backgrounds? What about the fact that states in the Arab world have laughable bureaucracies and that records should be taken with a big ole’ dose of salt?

Irfan hasn’t had the pleasure of knowing Jacques as long as me or Dr Terry, so his responses are bit more polite and more serious than what we tend to throw at him now. I forget sometimes just how important obstinate, bellicose ignorance can be for igniting important dialogues (Donald Trump, anyone? Bernie Sanders?).

On a slightly different note: I wonder if the uncomfortable fact that some of Israel’s founders were terrorists, coupled with the fact that Israel is the most successful state in the post-Ottoman world today, is an unacknowledged reason why Arabs have turned to the same tactics today. Why would anybody want to copy a failure, after all?

*The World’s Your Stage* New book by our own Warren Gibson!

Brandon Christensen Books, Current Events ,

The subtitle is How Performing Artists Can Make a Living While Still Doing What They Love.

Here is the link to amazon. You can also find it in the book pile to your right. Hopefully Dr Gibson will be able to blog a bit about the book in the next few weeks or so…

El Día que los Argentinos Superamos el Cinismo

Eliana Santanatoglia Current Events, Liberty, Politics , , , ,

Hace una semana que Mauricio Macri (Cambiemos) es el nuevo presidente electo de Argentina y ya todo parece distinto. A pesar de muchas y muy perjudiciales medidas del gobierno kirchnerista saliente (nombramiento de personal, sanción de leyes controvertidas, emisión de dinero, endeudamiento de último momento) la mayoría de los ciudadanos nos sentimos optimistas respecto del futuro en Argentina. Incluso ya nos hemos puesto a debatir acerca de las ventajas y desventajas de tal o cual ministro elegido por Macri, como si viviéramos en un país normal.

El domingo pasado, cuando ya era seguro que Macri había ganado las elecciones y estaba dando su discurso, lloré. No era un llanto triste, ni siquiera un llanto de emoción, era un llanto de alivio. Luego algunos amigos y familiares me confesaron que también habían llorado. Sentí (sentimos) que nos habían sacado el pie del pecho, que nos ahogaba desde hacía mucho tiempo.

Macri ganó en una segunda vuelta contra Daniel Scioli (Frente para la Victoria), candidato del gobierno kirchnerista. Pero no es la figura de Macri ni las propuestas de políticas públicas de Cambiemos (coalición del partido de Macri -Propuesta Republicana-, la tradicional Unión Cívica Radical y el partido de Lilita Carrió, Coalición Cívica) las que nos hicieron saltar las lágrimas. Era el sentir que, finalmente, podíamos descomprimir, que podíamos proyectarnos, planear; que, después de mucho tiempo, podíamos opinar sin miedo.

Y creo que esa emoción estaba conectada, a su vez, con la sensación de que los argentinos (o la mayoría al menos) habíamos dado un primer paso hacia la superación de un profundo cinismo que tiñó la política, e incluso todas las relaciones sociales en la Argentina los últimos años y que el modelo kirchnerista supo explotar y profundizar, enseñando con el ejemplo.

¿A qué me refiero con el cinismo?

Mucho se ha hablado del resentimiento argentino pero, a mi entender, el cinismo es un paso posterior y más profundo de este sentimiento. Al resentimiento lo entiendo como un derivado de la envidia en su aspecto más negativo. Es decir, como el deseo de tener lo que el otro tiene o de estar en una situación (más privilegiada) en el que el otro se encuentra y que uno no puede alcanzar. Es algo así como la suma de la envidia y la impotencia. El resentido prefiere que nadie goce de aquel “privilegio” del que él no puede gozar. Lo más insólito es que en Argentina el resentimiento se da en todas sus variedades, no sólo de los pobres a los ricos, de los viejos a los jóvenes, de los feos a los lindos, de los gordos a los flacos, sino que uno puede encontrar una persona joven, linda, flaca y rica que sea tremendamente resentida (porque los padres no lo quisieron, porque creen que no tienen las oportunidades que tendrían en otros países, porque no encuentran motivación en nada, porque quiere que alguien lo admire y no encuentran quién, etc.).

A pesar de esto, encuentro en este sentimiento todavía un resabio positivo: el resentido entiende, todavía, que alguien puede llegar a algo bueno a través de medios legítimos u honestos. No descree totalmente de la posibilidad de que a alguien (no a él) le haya ido bien, se haya hecho rico, sea admirado o tenga algún talento por derecho propio. El resentido sólo siente que él no es capaz de tal proeza y, por lo tanto, preferiría que nadie lo pueda lograr.

Creo que el cinismo implica un paso más, aquel que sostiene la idea de que nada puede ser obtenido legítimamente, de buena fe. Que no existen caminos honestos, legítimos, correctos, meritorios u honorables que nos puedan llevar a un bienestar personal o material. Para el cínico todo es engaño, trampa, privilegio o arbitrariedad. Así, se sospecha que toda persona que tiene dinero, lo obtuvo de forma ilegítima, como producto de una actividad ilegal (corrupción, negociado), o de alguna trampa o subterfugio (no pagar impuestos, estafar) o que, meramente, es una persona de suerte (herencia). Incluso si esta persona no ha realizado ninguna actividad inmoral o ilegal, probablemente la haya realizado su antecesor (padre, abuelo) o alguien por él. Pero esto no se aplica sólo a la fortuna material, el cínico argentino ya no cree que se pueda lograr nada (título, puesto, premio, honores) de forma legítima. Es seguro que detrás de ello ha habido contactos, favores, negocios ilegales, trampas.  Lo peor es que, finalmente, lleva adelante una vida plagada de mentiras, trampas y violación de las reglas, creyendo que está justificado, que así son las cosas. “Es lo que hay” reza una de las frases más horribles del vocabulario argentino actual.

El cinismo, así, se ha independizado ya del resentimiento y cuenta ahora con fuerza propia, sosteniendo toda una estructura de creencias y relaciones. Si llevamos esta cosmovisión a la política, vemos cómo ésta se ha concebido últimamente sólo como el medio particular donde se busca desembozadamente el poder (y la riqueza mal habida) y donde se habilitan todos los medios para llegar a este objetivo. En definitiva, la política representa una forma velada de violencia que ya no es quizás, física, pero si es psicológica, social, institucional. De esta manera, aquellos que (por fuerza o por azar) obtienen la mayoría, pueden, entonces, hacer lo que quieran, interpretando las reglas a su favor e incluso cambiándolas cuando no les convengan. Estoy segura que durante mucho tiempo, muchos argentinos no criticaban las formas autoritarias y, en muchos casos, delictivas del gobierno porque consideraban que, de ellos estar en su lugar, hubieran hecho lo mismo. Esto representa, en mi opinión, el sumun del cinismo. Ya no se tiene confianza ni siquiera en la constitución moral de uno mismo.  Esto nos ha llevado a la situación penosa en la que nos encontramos, no sólo de pobreza material (a causa del delito público y privado) sino de fragilidad institucional, en la cual nadie puede crear expectativas, planear, crecer, cooperar o siquiera, coordinar con los demás.

El triunfo de Macri puede leerse de muchas formas pero, independientemente de sus características como líder, hubo un gran número de personas que lo eligieron porque preferían votar cualquier candidato al candidato del kirchnerismo, Daniel Scioli. Éste, aunque al principio parecía mucho  más abierto al diálogo y  moderado que la familia Kirchner, terminó representando al “modelo” kirchnerista, un paquete muy pesado compuesto por una forma muy autoritaria de ejercicio del poder, un embrollado conjunto de consignas y prejuicios y una forma muy sospechosa de hacer negocios.

Macri se presentó como un candidato de “buena fe” (lo repetía siempre que podía) y el mero hecho de que mucha gente haya creído posible que nos gobierne una persona que se presente de esta manera ya significa, para mí, un gran paso hacia el abandono del cinismo.

Varios elementos más se suman a este panorama: más allá de las críticas, todos los candidatos de Cambiemos hicieron un gran esfuerzo por no contestar los agravios que, desde la “campaña del miedo” de Scioli, no faltaban ni un solo día. Además, la imagen franca y honesta de María Eugenia Vidal y su victoria como gobernadora de la provincia de Buenos Aires (tradicionalmente gobernada por caudillos peronistas) dejó entrever que los ciudadanos tienen un límite respecto de cuánta agresión, falta de gestión y maltrato pueden soportar. Por último, el macrismo ofrece gestión, dialogo, equipos, aprendizaje, todo un vocabulario ajeno al debate político nacional de los últimos doce años.

Por una vez, muchos votantes comenzaron a pensar que tal vez tanto descreimiento en sí mismos y en las instituciones –que, en definitiva, son el fruto de las interacciones de los individuos-, nos habían llevado a la pobreza e inseguridad en la que vivíamos.  Que quizás ya era momento de abandonar la sospecha constante, el enfrentamiento sin cuartel, la resignación frente al delito, el abandono de la libertad y el gobierno del miedo.

No sé cómo gobernará Macri a nivel nacional pero le auguro lo mejor a él y a su equipo. Ya llegará el momento de analizar sus decisiones y planes de acción. Mientras tanto, me alegro de que gran parte de los argentinos, de una vez (y espero que para siempre) hayamos comenzado a abandonar el cinismo y a creer en los caminos de esfuerzo, talento, trabajo, confianza, cooperación. Por último, espero que este camino nos lleve a confiar más en nosotros, en nuestras capacidades y valores y que gocemos del valor de ejercer nuestra libertad.

From the Comments: A libertarian solution to Daesh (ISIS/ISIL) and the civil war in Syria

Brandon Christensen Comments, Current Events , , , , , , , , , , , ,

I have 3 scenarios in mind, and multilateralism is a must for all of them. 1) I’m still a proponent of recognizing the separatist aspirations of Mideast factions and introducing new, smaller states into the international order (haphazard though it may be). This was done after WWI but in the wrong manner. There was an international element to it then (UK, France, etc. working together), but there were also representatives of various Mideast factions at the table and they were ignored (the reasons why are many and I won’t delve into them here). This time, placing those Mideast factions on an equal footing with Western players (and Russia) is a must for things to work out.

2) North America has to perform a delicate balancing act now that Ankara screwed up. NATO has to stand strong against Putin’s public condemnations and tough talk and back Turkey in all public and behind-the-scenes forums. At the same time I would use Turkey’s mistake to initiate a new state in the Kurdish region, one that is not explicitly Kurdish of course but one that encompasses most of the Kurds in Syria and Iraq. Use the UN Security Council to do it; exploit Putin’s anger and get him to renege on his policy of not recognizing separatist aspirations because of the sovereignty argument. Then get him to recognize that a new state in the Kurdish region (that doesn’t change Turkey’s current borders) is more than enough revenge for shooting down a plane.

3) North America should get out of France’s and Russia’s way in Syria for the time being (this should be done in tandem with the diplomacy I advocate above). Let them work together and let off some steam. The two of them, with Assad’s help, might be able to destroy ISIS (neither Russia nor France is as careful as the US when it comes to civilians, and in this scenario their ruthlessness might be a plus for long-term peace; the fact that the US won’t get blamed for the violence is a big plus, too). Assad would then be able to stay in power, but this is a big MAYBE and he will have lost the the Kurdish part of the state (remember Russia helps with Kurdistan becoming a reality because it angers the Turks). With hundreds of thousands of dead people from all over the world and millions of displaced people, Assad’s record of incompetency will most likely force the French and Russians to find a way to push him out of office and usher in a new strong man (only a strong man can govern a state like Syria). While Paris and Moscow search for a strong man, the West should continue its policy of recognizing regions that want out of Damascus’s orbit; keep Russia in the loop on this. By the time Paris and Moscow find a new strong man, what’s left of Syria might actually be able to hold elections and have a government that is constrained by a constitution and the strong man won’t be needed.

3b) ISIS in Iraq: Recognize ISIS’s territorial claims in Iraq (the ones that don’t overlap with Kurdistan’s, of course). That’ll force it to actually govern and will bind it to international law. We’ll see ISIS quickly collapse, and in its place will be a small country that is war-torn but with manageable problems (unlike in a large state like Iraq). This new country would be free to join up with Baghdad again or it could choose to go its own way. There would be at least three states in what is now Iraq, a big step forward in a world that is more interconnected economically and thus less in need of a big bad military to fight massive, bloody wars over territory.

(I’d be happy to argue with others about how libertarian my argument is, too.)

This is from yours truly, in response to a question from Professor Amburgey about libertarian foreign policy. Is this feasible? Absolutely. Is it likely? No, but when has that ever stopped libertarians from using logic and history to debunk statist fantasies?

Libertarians try to build off of the individual when it comes to policy, which means their policies are going to be both internationalist and skeptical of the state’s ability to accomplish an aim. I think my short answer in the threads does this in a mostly competent manner. It’s a multilateral approach which eliminates any ‘central planning’ aspect, and it acknowledges both the process of the rule of law (however haphazard it may be) and the inability of large states to govern populations competently (thus my argument for decentralization – through the legal process).

The Incredible Bread Machine (R.W. Grant)

Chhay Lin Lim Economics, Law, Liberty , , , , ,

This is a legend of success and plunder
And a man, Tom Smith, who squelched world hunger.
Now, Smith, an inventor, had specialized
In toys. So, people were surprised
When they found that he instead
Of making toys, was BAKING BREAD!

The way to make bread he’d conceived
Cost less than people could believe.
And not just make it! This device
Could, in addition, wrap and slice!
The price per loaf, one loaf or many:
The miniscule sum of under a penny.

Can you imagine what this meant?
Can you comprehend the consequent?
The first time yet the world well fed!
And all because of Tom Smith’s bread.

A citation from the President
For Smith’s amazing bread.
This and other honors too
Were heaped upon his head.

But isn’t it a wondrous thing
How quickly fame is flown?
Smith, the hero of today
Tomorrow, scarcely known.

Yes, the fickle years passed by;
Smith was a millionaire,
But Smith himself was now forgot
Though bread was everywhere.

People, asked from where it came,
Would very seldom know.
They would simply eat and ask,
“Was not it always so?”

However, Smith cared not a bit,
For millions ate his bread,
And “Everything is fine,” thought he,
“I am rich and they are fed!”

Everything was fine, he thought?
He reckoned not with fate.
Note the sequence of events
Starting on the date
On which the business tax went up.
Then, to a slight extent,
The price on every loaf rose too:
Up to one full cent!

“What’s going on?” the public cried,
“He’s guilty of pure plunder.
He has no right to get so rich
On other people’s hunger!”

(A prize cartoon depicted Smith
With fat and drooping jowls
Snatching bread from hungry babes
Indifferent to their howls!)

Well, since the Public does come first,
It could not be denied
That in matters such as this,
The Public must decide.

So, antitrust now took a hand.
Of course, it was appalled
At what it found was going on.
The “bread trust,” it was called.

Now this was getting serious.
So Smith felt that he must
Have a friendly interview
With the men in antitrust.
So, hat in hand, he went to them.
They’d surely been misled;
No rule of law had he defied.
But then their lawyer said:

The rule of law, in complex times,
Has proved itself deficient.
We much prefer the rule of men!
It’s vastly more efficient.
Now, let me state the present rules.

The lawyer then went on,
These very simpIe guidelines
You can rely upon:
You’re gouging on your prices if
You charge more than the rest.
But it’s unfair competition
If you think you can charge less.

A second point that we would make
To help avoid confusion:
Don’t try to charge the same amount:
That would be collusion!
You must compete. But not too much,
For if you do, you see,
Then the market would be yours
And that’s monopoly!”

Price too high? Or price too low?
Now, which charge did they make?
Well, they weren’t loath to charging both
With Public Good at stake!

In fact, they went one better
They charged “monopoly!”
No muss, no fuss, oh woe is us,
Egad, they charged all three!

“Five years in jail,” the judge then said.
“You’re lucky it’s not worse.
Robber Barons must be taught
Society Comes First!”

Now, bread is baked by government.
And as might be expected,
Everything is well controlled;
The public well protected.

True, loaves cost a dollar each.
But our leaders do their best.
The selling price is half a cent.
(Taxes pay the rest!)

A Victory for the Big Center

Federico Sosa Valle Liberty, Politics , , , , , , , , ,

“To my left, the wall,” Argentina’s President Cristina Fenández de Kichner (CFK) had expressed some months ago. Many of her detractors agreed with her on this opinion, while some others doubted where exactly to place the wall -and how far. The label of “Populist” might be subject to controversy as well, but everyone will at least agree on one single definition: her political strain could be everything but centrist.

Notwithstanding “Peronism vs anti Peronism,” “Populism vs Rule of Law,” “Left vs Right,” “Kirchnerism vs anti Kirchnerism” were some of the terms articulated along the presidential campaign whose run off has just had been won by Mauricio Macri, from the challenging front “Cambiemos” (Let’s Change), the decisive point of discussion of the past election was “Big Center vs Hegemony.”

The Big Center could be defined as the coalition of the Center-Left and the Center-Right in order to preserve a political system which allows the competition between both wings from the menace of a radical hegemonic force. That is why it would be a mistake to characterize the winning coalition as a Center-Right or a non-Populist political party. “Cambiemos” (Let´s Chance) has won the election with the support of both Centre-Right and Centre-Left voters and both Populist and non-Populist strains. Its political platform contains an orthodox monetary policy as well as the continuity of the policies on helping to alleviate poverty. Mauricio Macri won in the main cities with European ancestry population, such as Buenos Aires, Córdoba, Rosario, Mendoza, and also won in the Province of Jujuy, where he finished his campaign with a ancient ritual salutation to the Pachamama, one of the most important pre-Columbian deities.

By the width of “Cambiemos” coalition one could imagine how much was at stake. Which will be the final turn of the new government is something that generates no concern among its supporters. It is clear that it will remain circumscribed to the “Big Center.” Perhaps the definition will depend upon the ability of the Peronist Party -from now on in the opposition- to reassess its political strain: to turn into a Center-Right party, or into a Center-Left one or to insist on becoming a radical force. Given that “Cambiemos” has been delimiting its political discourse as a mirror of the “Kirchnerism,” we can expect the former to place itself in the political spectrum in reaction to its opposition. Nevertheless, all of us are convinced that Argentina’s political language will return to the categories of the Modern democracies.

Putting a stop to the Argenzuela Project

Brandon Christensen Current Events, Politics , , , , , , , , , ,

[Editor’s note: The following piece is written by Dr Nicolás Cachanosky, an economist at Metropolitan State University, Denver and a native Argentinian. Dr Cachanosky hails from the same PhD program (at Suffolk University) as Rick, who introduced us. His homepage is here, and he is also a member of the group blog Punto de Vista Económico (which you can find on the blogroll here at NOL). Check out his popular work for the Mises Institute, too. – BC]

For the last 12 years Argentina was under the influence of the Kirchner administration. First by President Néstor Kirchner (NK), and then two terms by her wife (and widow since 2010) Cristina Fernandez de Kirchner (CFK). Their plan, as perceived by many, was to alternate presidential terms between NK and CFK and remain in power endlessly. While this plan came to an end with NK’s death in 2010, CFK started to entertain the idea of reforming the Constitution to be able to run a gain for office. Because this was not possible, she chose Daniel Scioli, the Governor of Buenos Aires Province to be her successor. Last Sunday, November 22nd, Mauricio Macri, Mayor of Buenos Aires City beat Scioli in a ballotage and became president elect starting his term this coming December 10th.

Argentina was in path to become what is referred as Argenzuela. Namely, the Kirchner administration was taking the country, step-by-step, to become the next Venezuela of Latin America in a close way to what has been described as the four stages of populism. Under the Kirchner administration, the government increased their political ties with Venezuela, Iran, and China, at the expense of political relations with countries like the United States, Germany, and the United Kingdom. But the resemblance was not only in terms of political friendship, but on institutional and economic reforms. Argentina became a country where “Republic” is just a word on paper without a real presence in the country’s institutional reality. According to the Fraser Institute’s Economic Freedom of the World, in 2003 Argentina ranked 99 out of 153 countries. By 2012 it ranked 149 out of 152 countries. The loss of economic freedom was fast and significant. Economic troubles and imbalances did not take long to appear.

Macri’s victory in the presidential elections put a stop to the Argenzuela project. We know what a presidency by Macri won’t look like. But it is still hard to say what it will actually look like. Macri is known for his emphasis not in free or unfree markets, but on an efficient administration. While not difficult to be more free market than the Kirchners, it might prove difficult to describe Macri’s political movement, Pro, as a free market party. The Kirchner administration has refused, at least so far, to share information with Macri and his appointed ministers, so the real situation of the economy and the Treasury remains unknown. Macri and his team are working on reform plans half-blinded because they don’t have reliable economic information, if they have it at all.

Specific reforms by Macri are still unknown (at the time of writing these lines), but his team of Ministers has already been announced. The people he’s bringing to the government with him show significant successful careers in government, the private sector, and international organizations (her chosen Chancellor is the Chief of Staff of Ban Ki Moon, General Secretary of the United Nations.) This is a clear contrast with the Kirchner administration, where all the Ministers showed a strong ideological motivation before professional accomplishments.

The economic crisis in Argentina hands Macri a unique opportunity to carry long needed significant reforms. He has, also, a unique political position. His political party has not only won the presidential election, with Pro Macri has also retained the Mayor’s office of Buenos Aires City and also won the Governor elections for the Buenos Aires Province. Macri’s Pro is in charge of the three most economically and political important districts. Let us hope that Macri does not become yet another lost opportunity in Argentina’s history.

The Dangerous Inequality Meme

Fred Foldvary Economics , , , , , , , , ,

The inequality of wealth and income has become a meme loaded with danger. A “meme” is an idea that gets propagated like genes in biology. Economic inequality has long been a topic of interest, but during the past few years, and especially during the 2015-2016 American elections, the inequality meme has erupted into a major political issue among those who identify as progressive, liberal, and socialist.

The facts about inequality in the USA are clear. Since 1970, income inequality has increased. As national income has grown, most of the gains have gone to the rich. Average incomes have even dropped since the recession of 2007-2009.

During the 1800s, the first economist to analyze equality and inequality was Henry George. Karl Marx had touched on economic inequality by saying that the surplus from production was due to labor but was captured by the capitalist, the owner of the firm and its tools. Thus, the proletariat, the workers, stay poor and the capitalists get rich, creating inequality. But Marx and his followers focused on the conflict between labor and capital rather than the inequality.

Henry George pointed out that the surplus from production is not in wages, nor in business profits, but in land rent, which is a pure surplus, since land has no cost of production. George showed how land rent captures the gains from economic progress, creating the inequality in wealth and income between workers and the landowners. Competitive firms make normal profits, which has no surplus. Of course monopolies can capture surplus also, but the profits from entrepreneurship are a bonus to society, rather than a social problem, as entrepreneurs drive innovation and economic progress.

Unfortunately, when the classical economics of the 1800s turned into the neoclassical doctrines of the 1900s, both by design (in opposition to the Georgist remedy of taxing land value) and for mathematical convenience, land was dropped as an input factor, and mainstream economics became the two-factor production function Q=f(K,L). It is illogical that land rent gets included in the distribution of income in the return on K, but excluded on the production side, as the models are based only on the two inputs, labor L and capital goods K. This contradiction is not questioned by graduate students in economics, who are too busy learning the calculus of “math econ” to bother asking if the whole system makes sense.

Therefore the inequality meme is now blended with the labor-capital meme, ignoring the real source of economic inequality, unequal land tenure. Politicians exploit the all-too-real economic inequality with a superficial, simplistic, and dangerous remedy: tax the rich and transfer the funds to the poor. Of course governments are doing that already, and that has not reduced inequality, but the welfare-statists insist that government should do more of it.

Conservative opponents of greater redistribution point out, correctly, that higher taxes and takings from the rich will stifle entrepreneurship and savings, reducing the economic growth. But other than eliminating some of the tax deductions and generating more growth by reducing the top tax rates, the conservatives have no effective remedy. Their call to flatten the tax rates play into the political agenda of the redistributionists who call for higher, not lower, tax rates on the rich.

The danger in the inequality meme is the confiscation of the wealth not just of the rich but also of the middle class. A family that spent all its income and now has no wealth would be given welfare aid, while the family with the same income but frugally saved its income for retirement or to provide for their children would have their wealth taken away, not just by ordinary and predictable taxation, but by a sudden taking, as happened in Cyprus in 2013. Government chiefs facing a debt crisis can kill two birds with one stone: confiscate savings and use some of it to pay off debt and the rest to transfer to the poor. Such confiscation has been suggested by the International Monetary Fund, which lends funds to countries bogged down in debt. In its publication Fiscal Monitor Report, the IMF stated (pdf):

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).” There we have the proposition that such confiscation of wealth can be “fair” (49).

This IMF capital-levy proposition was presented in Forbes with the title, “The International Monetary Fund Lays The Groundwork For Global Wealth Confiscation.” The Wikipedia article on “capital levy” shows that this meme is getting some traction, such as by Germany’s Bundesbank. The concept of a capital levy, confiscation of savings and investment, comes from the meme of economic inequality that looks only at the superficial existence of unequal wealth and not to the source.

It has been well pointed out by British journalist and economist Fred Harrison in his Youtube video “Ricardo’s Law: the Great Tax Clawback Scam” that while the rich pay much in taxes, many of them get the tax back, as a clawback, from government’s public goods, which generate higher rent and land value.

The effective and equitable remedy for economic inequality is not redistribution but the proper initial distribution of income. Wages and capital yields should be kept by the workers and investors, while land rent should be equally distributed either as cash or in public services. Public revenue from land rent would equalize income while promoting growth and raising wages. We need to bring land back into economic discourse, but that requires penetrating the appeal of superficial thinking. That’s what Henry George tried to do, and the Georgist meme had reached up to the heads of state in China, Great Britain, and Russia (after the first revolution with Kerensky), but World War I blasted the impending tax reforms to bits.

The candidates who now rant against inequality, the corporations, and the billionaires, even if they don’t win the election, will influence policy and generate calls for more redistribution and, perhaps in the next financial crisis, a capital levy. While alarmists often exploit impending doom for their own gains, sometimes they are right.

—————————–

This article is also in progress.org under the title “Tyrants Exploit Income Inequality”

[Ed. note: I added tags, categories, and links, and patched up some grammar – BC]

Book Review: Hans-Hermann Hoppe – Economic Science and the Austrian Method

Chhay Lin Lim Books, Economics, Liberty, Philosophy , , , , , , , , , , , , , , , , , ,

I decided to read Hans-Hermann Hoppe’s Economic Science And The Austrian Method (1995) in order to grasp a deeper philosophical understanding of the Austrian School’s methodology of economic inquiry. I was especially interested in Immanuel Kant’s influence on Ludwig von Mises and how Mises had used Kant’s epistemological insights to construct praxeology, the study of human action (economics included) that is purely deductive in nature.

Those who are acquainted with scientific methodologies in the field of economics may have heard of the controversies surrounding praxeology. Living in an empirical age, many people may be inclined to question the validity of a science that claims to arrive at economic laws from pure deduction whose validity can be established independently from observations. Praxeological propositions are indeed much more “like those of logic and mathematics, a priori” (Mises, 1966, p. 32). Such a science may strike the skeptics as being disquietly dogmatic.

In this book review, I will firstly give a brief discussion why it is important at all to discuss the epistemological foundations of economic science. Thereafter, I will discuss Hoppe’s thesis. I will describe the philosophical aspects of praxeology that can be traced back to Kantian epistemology. I will moreover summarize Hoppe’s critique of empiricism and historicism, and why Mises believed that economics is essentially praxeology. Lastly, I will give my personal thoughts on the book.

Why should we discuss the epistemological foundations of economic science?
The most immediate answer to this question is that different epistemological foundations lead to different methodologies and different theories, which can lead to different interpretations of real-life phenomena. Take for example the interpretation of an historical economic event, the Great Depression. Murray Rothbard, because he is working within the context of praxeology makes use of the praxeological Austrian Business Cycle Theory. This theory focuses on the expansion of the money supply as an explanation of the onset of the ‘boom’ in the 1920’s which eventually resulted in the ‘bust’ in 1929. Milton Friedman and Anna Schwartz in A Monetary History Of The United States (1963), while not applying the ABCT, have focused only on the contraction of the money supply and the resulting higher interest rates in 1928 as the main cause of the Great Depression. Their application of different economic methods has led them to look for different possible historical causes of the Great Depression which has effectively resulted in different accounts of the same historical event. It therefore matters what economic methods are employed in economic research.

Now that we have established the importance of inquiring epistemological foundations and methodologies of economic science, I will turn to Hoppe’s thesis.

Kant and synthetic a priori propositions
Working within the rationalist tradition of Leibniz and Kant, Mises attempts to present the proper way through which economic science – a science that according to Mises falls within the broader science of human action, praxeology – should be conducted. He resorts to the Kantian conception of the nature of knowledge and explains praxeology in terms of Kantian terminology. Hence, Hoppe firstly directs the reader to Kantian epistemology.

Kant had developed the idea that all propositions are either analytic or synthetic and either a priori or a posteriori. The difference between analytic and synthetic propositions is that the former is true by virtue of their meaning or as Kant would have phrased it himself, “the predicate B belongs to the subject A as something that is (covertly) contained in this concept A” (Kant, 1781, A:6-7). Take for instance the following proposition: “Bachelors are unmarried.” This proposition is analytic, because the predicate, ‘unmarried’, is part of the concept of a bachelor. Analytic propositions are regarded as tautological propositions; they simply restate the definition or a concept incorporated within a word and therefore they do not tell us anything meaningful about the world. A synthetic proposition on the other hand is a proposition whose predicate concept is not contained in the subject’s concept. It could therefore express something meaningful about the world. An example of a synthetic proposition is: “All bachelors are unhappy.” The concept ‘unhappy’ is not contained within the definition of ‘bachelor’, and expresses something meaningful about ‘bachelors’.

The distinction between a priori and a posteriori is as follows: a priori propositions are propositions whose justification does not rely upon experience, but solely on logical reasoning. The justifications of a posteriori propositions on the other hand, do rely upon experience. Examples of a posteriori propositions are “Some bachelors I have met are unhappy” or “Siddharta Gautama left the palace.”

The big question is: do synthetic a priori propositions exist? Kant certainly believed that they do exist, “and it is because Mises subscribes to this claim that he can be called a Kantian” (Hoppe, 1995, p. 18). In Critique of Pure Reason (1781), Kant contended that synthetic a priori propositions do exist and as an example he took mathematics (Kant, 1781, p. 55). The statement “7 + 5 = 12” is not dependent on experimentation and the concept 12 is not contained in either the definitions of 7 or 5. According to Kant, a priori propositions are derived from self-evident axioms. We can find such axioms by reflecting upon ourselves and understanding ourselves as knowing subjects. However, how can truth claims derived from reflection in our mind have any basis in reality? Is Kant here running into the problem of idealism – a notion that it is the mind that constructs reality and superimposes itself upon reality in such a way that it fits within the mind’s necessary laws?

According to Hoppe, Kant had not given a satisfactory response to this issue and future thinkers would have to take on the challenge of solving this problem. Hoppe believes that Mises had done so successfully when he had averred that action provides the link between mind – body and between mind – external world: “[W]e must recognize that such necessary truths are not simply categories of our mind, but that our mind is one of acting persons. Our mental categories have to be understood as ultimately grounded in categories of action” (Hoppe, 1995, p. 20). It is through action that the mind and reality are related: “[A]cting is a cognitively guided adjustment of a physical body in physical reality” (Hoppe, 1995, p. 70).

Another issue that arises with regards to the possibility of synthetic a priori propositions, and which I have found quite confusing myself is the following: does Hoppe suggest that we can arrive at knowledge without any experience of ourselves or the external world at all? No, according to Hoppe “the truth of a priori synthetic propositions derives ultimately from inner, reflectively produced experience” (Hoppe, 1995, p. 19). This experience is phrased by Stolyarov II as “the mind’s identification of facts about actually existing entities, including the identifier himself” (Stolyarov II, 2007, p. 53). In this sense, the action axiom is experientially-derived, but it is not subjected to the empiricists’ narrow view that all knowledge must be testable, verifiable, or falsifiable.

Empiricism, Historicism, and Praxeology
When Mises systematically constructed the foundations of praxeology, he faced a double-challenge; (A) empiricism which was quickly becoming the main influence in the economics discipline, and (B) historicism which was then a prevailing ideology at German-speaking universities.

(A) Empiricism
Empiricism is the “philosophy which thinks of economics and the social sciences in general as following the same logic of research of that, for instance, of physics” (Hoppe, 1995, p. 28). Hoppe writes that empiricism is governed by the following two related basic propositions:

(1) that empirical knowledge, knowledge about reality, must be subjected to falsifiability and verifiability by observational experience;
(2) and that empiricist research formulates their explanations in terms of causality, i.e. “if A, then B”. (Hoppe, 1995, pp. 28-29)

Hoppe continues to write that the validity of empirical statements

can never be established with certainty… The statement will always be and always remain hypothetical… Should experience confirm a hypothetical causal explanation, this would not prove that the hypothesis was true. Should one observe an instance where B indeed followed A as predicted, it verifies nothing… Later experiences could still possibly falsify it. (Hoppe, 1995, p. 29)

Empirical knowledge is hence contingent on historical facts. Neither confirmation nor falsification by observational experience can prove that a relationship between phenomena does not or does exist. By emphasizing that our knowledge of reality must stem from observational experience, they directly deny a science that avers that a priori knowledge can give us any meaningful explanation of real phenomena. However, as Hoppe and Mises point out, the statement that meaningful synthetic a priori propositions cannot exist is itself a synthetic a priori proposition. Mises has put this empiricist contradiction the following way in The Ultimate Foundation of Economic Science (1962):

The essence of logical positivism [logical empiricism] is to deny the cognitive value of a priori knowledge by pointing out that all a priori propositions are merely analytic. They do not provide new information, but are merely verbal or tautological, asserting what has already been implied in the definitions and premises. Only experience can lead to synthetic propositions. There is an obvious objection against this doctrine, viz., that this proposition that there are no synthetic a priori propositions is in itself a … synthetic a priori proposition, for it can manifestly not be established by experience. (Mises, 1962, p. 5)

Hoppe mentions a second contradiction of empiricism which regards historical events. Empiricists believe that particular events may cause any particular human action. They attempt to find such causal relationships in order to explain historical events. However, in order to do so, empiricists must assume that causality within historical sequences exists through all times. This assumption itself is not based on experiential observations, and must presuppose a priori knowledge that “time-invariantly operating causes with respect to actions exist” (Hoppe, 1995, p. 36). In addition, Hoppe identifies a third contradiction with respect to social phenomena. The empiricists believe that in order to confirm and falsify hypotheses, one must be able to learn from historical and social experience. If one would deny this, then why should one engage in empirical research at all? This however presupposes that “one admittedly cannot know at any given time what one will know at a later time and, accordingly, how one will act on the basis of this knowledge” (Hoppe, 1995, p. 37). Admitting that humans learn from historical and social experience, one cannot deny that empirical causal constants in human action do not exist. “The empiricist-minded social scientists who formulate prediction equations regarding social phenomena are simply doing nonsense” (Hoppe, 1995, p. 38). Predicting human action is not a science according to Hoppe.[1]

The empiricists are mistaken in applying the methodology of the natural sciences into the fields of social science in order to predict human actions. Unlike natural elements, human beings can and do act differently under equal conditions. Thus, social history cannot yield any knowledge that can be employed for predictive purposes. Relating this to the quantity theory of money; if the money supply for instance increases, one can still not predict whether the demand of money will change as this is entirely dependent on human action. Nonetheless, one could assert that if the demand for money stays constant and the money supply increases, then the purchasing power of money will fall (Hoppe, 1995, pp. 44-45).

(B) Historicism
Historicism, the second challenge that Mises had to face, does not take nature as its model but literary texts. Historicists believe that there are no objective laws in economics, and that “historical and economic events are whatever someone expresses or interprets them to be” (Hoppe, 1995, p. 54). Historicism is therefore extremely relativist. However, according to Hoppe also historicism is fundamentally self-contradictory. If there are only interpretations and hence no constant time-invariant relations, then there is also no historicist constant truth about history and economics. If historicism does not give us any reason to believe in its doctrine, why should we adhere to its epistemological philosophy if its proposition implies that they themselves may not be true?

Next to his refutations of empiricism and historicism, Mises had hoped that he could demonstrate the existence of true synthetic a priori propositions. Such propositions would (1) not be derived from experience, and (2) they must yield self-evident axioms so that when one tries to deny it one is involved in self-contradiction. Mises believes that these two requirements are met by the axiom of action – the proposition that human beings act and display intentional behaviour (Hoppe, 1995, pp. 60-61). According to Mises, purposeful human behaviour exhibits a person’s pursuit of an end which he attempts to reach through the employment of particular means (at least time and body). The fact that a person pursues a particular goal with his action reveals that he places a relatively higher value (preference) on the goal than any other goals of action that he could have thought of at the beginning of his action. Human action also happens sequentially, implying that the actor can only pursue one goal at a time in which he has to forego other valuable goals temporally. Action therefore also implies choices and costs. An action furthermore implies loss (and profit), because every action accompanies a certain degree of uncertainty, whether the goal achieved has resulted in the value one has expected can only be known in retrospect. All these categories of action – values, ends, means, choices, preferences, costs, profit, loss, and time – are at the heart of economics (Hoppe, 1995, pp. 61-63). This insight establishes economics as a science of human action. Or as Hoppe asserts more precisely,

all true economic theorems consist of (a) an understanding of the meaning of action, (b) a situation or situational change – assumed to be given or identified as being given – and described in terms of action-categories, and (c) a logical deduction of the consequences – again in terms of such categories – which are to result for an actor from this situation or situational change (Hoppe, 1995, pp. 63-64).

The existence of the categories of action is derived a priori from the axiom of action, and not through observation. Any attempt to disprove it is futile, since “a situation in which the categories of action would cease to have a real existence could itself never be observed or spoken of, since to make an observation and to speak are themselves actions” (Hoppe, 1995, p. 63).

My thoughts on Hoppe’s book
The book serves as an excellent summary of praxeological philosophy and is a must-read for anyone who wants to start learning more about the subject. Reading the book, one feels that it is extremely concise (around 80 pages), but also dense. Hoppe directly discusses the essential philosophical aspects that one must know in order to understand praxeology as developed by Mises, and fortunately he leaves many footnotes for further reading.

I believe that Hoppe has skillfully shown that economics is part of praxeology, and that it indisputably deals with such categories of human action as values, ends, means, choices, preferences, profit, loss, time, and causality. He has furthermore provided a well-reasoned critique of the empiricist and historicist-hermeneutical interpretations of economics by showing that they are necessarily self-contradictory.

Understanding that economics should not be conducted within the methodological framework of the natural sciences has severe implications to the ways we should deal with data of real world phenomena. If, like praxeologists claim, we cannot predict human action then there is also little reason to believe that effective social engineering is possible. The fundamentals of the praxeological methodology are therefore also immediately relevant within discussions on the roles of the state in planning the economy.

Footnotes
[1] Hoppe calls it entrepreneurship.

Bibliography
Friedman, M. & Schwartz, A.J. (1963). A Monetary History of the United States 1867-1960. Princeton: Princeton University Press.
Hoppe, H.H. (1995). Economic Science and the Austrian Method. Auburn: Ludwig von Mises Institute.
Kant, I. (1781). Critique of Pure Reason. (W.S. Pluhar, Trans.) Indianapolis: Hackett Publishing Company, Inc.
Mises von, L. (1942). Social Science and Natural Science. In R.M. Ebeling (Ed.) Money, Methods, and the Market Process (pp. 3-15). Retrieved from http://mises.org
Mises von, L. (1966). The Ultimate Foundation of Economic Science. Retrieved fromhttp://mises.org
Stolyarov II, G. (2007). The Compatibility of Hoppe’s and Rothbard’s Views of the Action Axiom. The Quarterly Journal of Austrian Economics, 10, 2, pp. 45-62.