Books

Borderless Economics: Chinese Sea Turtles, Indian Fridges and the New Fruits of Global Capitalism

Warren Gibson Books, Economics , , , , , , ,

Robert Guest, the business editor for The Economist, has organized insights gleaned from 20 years of reporting on and analyzing events around the world into a breezy yet profound account of the flow of people and ideas across borders.

Raw immigration statistics miss the “networks of innovation,” as Guest calls them. Immigrants may find it difficult to adapt to a new land with strange customs and a new language. But in just about any American city they find a community of people like themselves who can ease the transition and help them get established. This process is good for everyone involved.

For example, Indian immigrants to America—most notably Silicon Valley engineers—are tightly networked among themselves and have contacts in India and around the world. Having made their fortunes, some then return to India to pursue business or philanthropic activities. To illustrate, Guest describes the Universal Identity program. Hundreds of millions in India have no public identity beyond their immediate communities. A team of Indian expatriates returned to India and launched a program to create a computer-based system that would allow Indians to submit to fingerprinting and retina scans and to receive a national ID number that would serve as their entrée into the modern Indian economy. Libertarians look askance at government identification numbers, but in rich countries we take for granted our ability to prove our identities. Continue reading →

Private Means, Public Ends: Voluntarism vs. Coercion

Fred Foldvary Books ,

Do you have friends who are socialists? Show them Robert Zimmerman’s chapter, “New York’s War Against the Vans” in Private Means, Public Ends. Zimmerman shows private enterprise efficiently providing much-needed transportation, while the city transit police block passenger pickup, issue summonses, and otherwise harass van operators and passengers. If government is needed to provide such public goods, why does government keep blocking private services?

The essays in Private Means, Public Ends demonstrate how private efforts have effectively provided public goods. This collection of mostly recent articles reprinted from The Freeman will challenge those who doubt the workability of free markets and buttress the thinking of those already oriented to liberty with excellent examples. Case after case, nicely combining stories with analysis, shows voluntary and market means as more effective than government, despite state barriers and imposed costs.

The introduction by Professor Mixon begins with the metaphor of free human action as a wildflower field, in contrast to the potted plants of state institutions. If wildflowers disappear and all we see are flowers in pots, who can imagine the breathtaking beauty of the wild field—nature’s spontaneous order? Continue reading →

Religion or Institutions? An Ongoing Dialogue

Brandon Christensen Books, Current Events, History, Liberty, Religion

Dr. Delacroix and I are continuing our back-and-forth over at Facts Matter. My latest volley:

Religion is often such an important part of a given culture that it is commonly treated separately giving the false impression that it’s a different subject in its own right [Dr. Delacroix]

This is true up to a point. Once a society adopts one of the “great religions” as their own, though, the cultural-religious blend disappears and two distinct categories arise. Small tribes with their parochial animist beliefs are one thing, but large nations sharing a holy book are quite another.

As it stands, the stonings of women in Saudi Arabia are political acts, not cultural ones. Thus the Saudis (or their enemies) are using religious undertones to their political advantage. The violence and backwardness of the region – which I readily admit is prevalent – goes back to institutions and their political and economic ramifications.

The lack of books in the Arab world is another case in point. During the late Ottoman era, and during the era of European imperialism, Arabs gobbled up books left and right. Once Arab socialism and other anti-colonial movements began to isolate their societies, the demand for books was severed.

What do you think would happen if the states of Iraq and Egypt, for example, suddenly lifted their controls on trade, universities, the press and the internet? Would Arab culture or Islam hinder the thirst for knowledge in the citizens of these countries?

Cue Marvin Harris.

Origins of Terrorism in the Middle East

Brandon Christensen Books, History, Religion , , , , , ,

I just recently came across a very, very good book on the history of the Middle East. As far as theory goes, it is lacking, but it is readable enough that the intelligent layman can pick it up and learn new things from it. Written by historian Eugene Rogan, it’s titled The Arabs: A History and it has won numerous awards. Be sure to check it out. One new fact that I learned is that while terrorism as a tactic in the Middle East did not appear on the radar until the 1920s, it was undertaken on behalf of Jewish interests, not Muslim ones. Rogan explains:

The terrorists had achieved their first objective: they had forced the British to withdraw from Palestine. Though their methods were publicly denounced by the leaders of the Jewish Agency [the pre-state government], the Irgun and Lehi [terrorist organizations] had played a key role in removing a major impediment to Jewish statehood. By using terror tactics to achieve political objectives, they also set a dangerous precedent in Middle Eastern history-one that plagues the region down to the present day.

Now, I am not “blaming the Jews” for terrorism in the Middle East, nor is the historian. What I would like to do is point out that the theories and excuses about Islam’s violent penchant produced by Western analysts are horribly wrong. In a similar vein, Arab culture is not to blame for the violence in the region, either. Terrorism is entirely a product of politics.

What we have in the Middle East is simply a problem of statecraft. A conceptual turn away from cultural and religious explanations for the violence in the Middle East and towards one that looks at political and legal institutions and the economic consequences that arise from them would do wonders for the region (and the world). If we cannot even agree on the fundamentals of what is wrong with the Middle East institutionally, we sure as hell are not going to agree upon anything else. This goes for domestic and regional factions in the Middle East as well as for Western ones.

Israel exists. It is a state in the Middle East, and a highly successful one at that. This may well explain why terrorism has been used so often, as a political tactic, for almost a century in the Middle East. It also helps to explain – conceptually – why terrorist attack rates were so high in Sri Lanka until the defeat of the guerrilla insurgency a few years ago, and why Latin America has suffered from chronic terrorism. Arab culture and Islam, on the other hand, do not explain terrorism in other parts of the world. I see no reason why we should make an exception to the rule for terrorism in Middle East. This is an institutional problem, not a cultural one.

Methodological Individualism

Warren Gibson Books, Liberty , ,

I am just now rereading Ludwig von Mises’s magnum opus, Human Action.  What a joy it is to get reacquainted with Mises’s masterful work and to use it as a benchmark to gauge my own intellectual odyssey since first reading it more than 40 years ago.

Early on the reader encounters the term “methodological individualism.”  This mouthful may seem at first to be some abstruse epistemological concept that can be forgotten once the foundations for Mises’s economics have been established.  On the contrary, revisiting Mises has made me realize just how thoroughly I have internalized the concept and what a big difference it has made in my thinking about political and economic controversies.

Let’s start with what methodological individualism is not.  It has nothing to do with “rugged individualism.”  It is not ideology at all.  It is a term that describes the essential nature of human thought and action.  It is a bedrock principle on which Mises grounds his entire exposition of economics.

“The Hangman, not the state, executes a criminal.”  This is Mises’s pithy summary of methodological individualism.  Mises does not deny that the hangman acts under the influence of his relationships to others in society.  He is an employee or a servant of some penal system and is obliged to carry out executions when so ordered. He may fear consequences if he fails to act as ordered.  He may have a family that he provides for.  He may wish to secure his place in Heaven. None of these conditions alters the basic sequence of events: The hangman ponders the action he is set to perform, thinking carefully or hardly at all.  He believes his best choice is to pull the rope that opens the chute.  He causes his arm to move and the deed is done. Continue reading →

An Act of Self-Defense: A Review

Warren Gibson Books, Liberty , ,

“The Tree of Liberty must be refreshed from time to time with the blood of patriots and tyrants,” said Thomas Jefferson.  Erne Lewis does a terrific job of adapting this theme to 21st-century America in his new novel, An Act of Self-Defense.

Like Atlas Shrugged, his story is set in an immediate future where the economy is collapsing, and more so than in Atlas, personal freedoms are vanishing.  Unemployment is at 20 percent and all communications are recorded and tracked by the NSA.  RFID badges are worn by all federal employees and will soon be required for all citizens.  A small group of patriots takes matters into their own hands, and the action is fast and furious.

Lewis draws the correct battle lines of our time: not left versus right but libertarian versus fascist.  The f-word correctly describes anyone on the left or right who would use government power to suppress personal or economic freedom while leaving nominal ownership in private hands.  The novel’s villains are of both stripes, some of them decent people who entered politics with good intentions but became corrupted.  That leaves libertarians as the only consistent defenders of what Ludwig von Mises called the “Free and Prosperous Commonwealth” founded on the rule of law, particularly respect for property rights.

I had to wonder, when reading his portrayals of  atrocities committed by government agents: How much of this is fiction?  Can they do such things?  Are they close? Have they already?  The Patriot Act is law, so the atrocities seem disturbingly plausible. Continue reading →

L’ Anarchisme et la recherche de la liberté: recommendations des Déserts du Nouveau Monde.

Jacques Delacroix Books, Current Events, Liberty ,

Je suis vieux mais j’ai quand même un copain lycéen à Paris. Je l’ai rencontré un Quatorze Juillet justement, en Californie où je vis depuis déjà longtemps. Ugo a quinze ou seize ans. Il me dit par courriel qu’il lit Bakounine et Kropotkine. Cela me fait plaisir à deux titres. D’abord, cela signifie qu’il a échappé à la malédiction du relent de totalitarisme collectiviste qui habite toujours de nombreux Français comme une croûte en Octobre colle encore aux lèvres des revenus de la colonie de vacances du mois d’Août.

La deuxième raison de ma réjouissance c’est que de telles lectures ne peuvent qu’allonger l’aune à laquelle Ugo mesurera la liberté. (J’allais dire la “liberté individuelle” mais, il n’y en a pas d’autre, c’est une mauvaise manie verbale.) Il me semble en effet que quand on vit dans le brouillard d’une societe étatique comme la France il doit être difficile seulement de reconnaitre le simple fait de liberté. Dans une telle société, on doit être menéinconsciemment à une mesure de la libertéétriquée pour la simple raison que les nombreux “droits” des autres ne peuvent que limiter naturellement, automatiquement les siens propres.

L’un de ces soi-disant droits est le droit de vivre correctement sans avoir jamais às’efforcer, c’est-à-dire aux crochets d’Ugo et d’autres qui ne rechignent pas à travailler ou àinventer. Continue reading →

Adamson’s Book Signing

Brandon Christensen Books, Current Events, History

Dr. Adamson’s new book just came out two weeks ago, and he has passed along a couple of photos from his book signing event. More below the fold. Continue reading →

Boombustology: A Review

Warren Gibson Books, Economics , , , , , , , , , , ,

These days commentators near and far are announcing booms and bubbles in Treasury securities, gold, China – perhaps even a bubbles. Vikram Mansharamani is in the China camp, but his arguments stand out from the others. If you can get past the title of his book – Boombustology – you will be rewarded with a thorough, well-documented, yet mercifully brief and readable exposition of a theory of booms and busts applied to past events and China’s future.

Most macroeconomists see the boom-bust cycle as an unsolved problem. Like physicists in search of a Grand Unified Theory, they long for a model that accounts for all the major aspects of the business cycle. Perhaps they are hampered by looking through the wrong end of a telescope. Mansharamani uses not just one but five “lenses” to examine the subject. In addition to micro- and macroeconomics, they include psychology, politics, and biology. He is not the first economist to invade these fields. Rather his accomplishment lies in assembling ideas from each of those areas, applying them to past boom-bust cycles, and putting his ideas on the line by issuing a brave prediction of a forthcoming Chinese economic train wreck.

Austrian Business Cycle Theory

The author’s macro lens includes Austrian business cycle theory. That theory says inflation of the money supply causes a drop in interest rates, which is misinterpreted as an increased aggregate preference for saving over consumption, leading to investments in more roundabout means of production. When it becomes clear that there has been no such preference shift, these undertakings are seen to be at least partial mistakes, requiring write-offs and retrenchment – a bust. The boom is the problem, not the bust, which is the market’s attempt to realign itself to the realities of time preference. Austrian business cycle theory has great merit but leaves some things unexplained.

Mansharamani’s micro lens includes the concept of reflexivity. Market participants don’t just observe prices but also influence them. Reflexive dynamics occasionally give rise to instabilities in which rising prices lead to increased demand.  A simpler term would be a “bandwagon effect.” I recall an office party in 1980 where one of the secretaries asked about buying gold – precisely at the peak, as it turned out. All she knew about gold was that it was way up and therefore must be going higher. I should have realized that when you see financially unsophisticated people like her climbing on a bandwagon, you can be pretty sure there’s no one left to sell to and nowhere for prices to go but down, which is where gold and silver prices went in 1980, and in a big hurry.

From psychology Dr. M. borrows ideas and data about cognitive biases. For example, subjects asked to guess some bland statistic, like the number of African countries that belong to the UN, are influenced by the spin of a wheel of fortune: When the wheel lands on a high number, they guess higher. He translates this and a dozen other cognitive biases into irrational market behavior that can foster booms and busts.

He introduces his biology lens with an analogy to the spread of an infectious disease. When the prevalence of a disease reaches a high level, the infection rate necessarily slows and the disease begins to wane, just like the 1980 gold market.  But it is devilishly difficult to “inoculate” oneself against infectious ideas. Individual investors who can do so have a decent chance to beat the market averages over time, I believe. (Those who would pursue these ideas in greater depth would do well to find James Dines’s quirky and expensive but worthwhile book, Mass Psychology.) Continue reading →

Don’t Forget

Brandon Christensen Books, Current Events, History

Michael Adamson’s new book, A Better Way to Build…, comes out on the 15th of this month. You can check out more of Dr. Adamson’s (bad ass) work in the ‘recommendations‘ section of the blog. He’s got stuff on Native American property rights (or lack thereof), US foreign policy, and the decline of Argentina just hanging out online waiting for curious minds to read and process.

Dr. Adamson is a historian by trade, and we’re lucky to have him on board here at the consortium. Also, check out his demolishing of the rationales used by the Bush administration to go to war in Iraq (the second time around).

Globalization: Its Context and Its Virtues

Brandon Christensen Books, History , , , ,

In my spare time I try to read literary masterpieces and popular non-fiction. The latest book that I’ve picked up is Charles Mann’s 1493: Uncovering the New World Columbus Created. I picked it up because the author’s previous work 1491, had a profound impact on my way of thinking about the world. The new book doesn’t disappoint. An excerpt:

One way to summarize [scholar’s] efforts might be to say that to the history of kings and queens most of us learned as students has been added a recognition of the remarkable role of exchange, both ecological and economic.

[…] In some respects this image of the past – a cosmopolitan place, driven by ecology and economics – is startling to people who, like me, were brought up on accounts of heroic navigators, brilliant inventors, and empires […] It is strange, too, to realize that globalization has been enriching the world for nigh on five centuries.

Indeed. I want to use this quote to level two separate criticisms, one at the Left and one at the Right. Continue reading →

Methodological Individualism

Brandon Christensen Books, Current Events, Economics, Links

That’s the title to co-blogger Warren Gibson’s latest piece in the Freeman. I wish I could copy and paste the whole thing, but you’ll have to settle for this juicy tidbit:

Let’s start with what methodological individualism is not.  It has nothing to do with “rugged individualism.”  It is not ideology at all.  It is a term that describes the essential nature of human thought and action.  It is a bedrock principle on which Mises grounds his entire exposition of economics.

“The Hangman, not the state, executes a criminal.”  This is Mises’s pithy summary of methodological individualism […]

When we think about the hangman from the point of view of praxeology (Mises’s name for the science of human action) we are not concerned with the social or psychological factors that may have influenced his action, nor the neural firings in his brain, nor the musculoskeletal actions in his arm.  We are simply observing that actions are always initiated and carried out by individuals and are always motivated by the individual’s expectation of being better off as a result of the chosen action rather than some alternative.

Do read the whole thing.

The Year is 1534, and…

Brandon Christensen Books, History , , , , ,

…a great deal of Spanish conquistadores are trying to cut up Mexico into personal spheres of wealth and property.  I am reading Robert S. Chamberlain’s 1966 book The Conquest and Colonization of Yucatan, 1517-1550, and so far what I have gleaned from it has been great.  Check out this passage:

“Attempted conquest with small numbers and insufficient support for expeditions […] were the result of overconfidence on the part of [the would-be conquistadores…] They had a total misconception of the character of many of the Maya.  [Two of the conquistadores] had seen a few Spaniards destroy Montezuma’s imposing empire and bring it under the yoke.  They were firmly convinced of the invincibility of their arms in face of any odds, and, underestimating the determination and military capacity of the Maya, they believed they could easily be subjugated.

Furthermore, until it was too late, [the conquistadores] failed to understand that many caciques gave fealty only as a temporary expedient, and that they intended to appeal to arms at the first opportunity […] Many mistakes could have been avoided had the [conquistadores] accurately appraised the character of the people with whom he had to deal.”

Now, since the writing of Chamberlain’s book, new statistics and revision of the historical account of the Spanish conquest of the Aztec Empire (referred to by specialists as the Triple Alliance rather than the Aztec Empire) has fleshed out his writings.  Instead of a handful of Spaniards that brought down the Triple Alliance, it was a combination of Spanish forces and tens, if not hundreds, of thousands of indigenous soldiers from rival states that crushed the Triple Alliance.  The vast majority of the indigenous soldiers were commanded by indigenous military officers. Continue reading →

The Myth of the Noble Savage

Brandon Christensen Books, History , , , , ,

Although most academic books and even standardized textbooks for American “students” in public schools no longer explicitly condescend to minorities in this country, there is a certain sense of condescension that still underlies the Left’s rhetoric when it comes to non-European peoples. Jacques Delacroix has given as good an explanation as any, so I’ll just outsource to him on that question, but what I’d like to do is highlight just how much human beings have in common.

When I was in Santa Cruz I found a fairly rare book that I had been looking for forever in one of that wonderful town’s many used bookstores, and it hasn’t disappointed. From Daniel K. Richter’s book The Ordeal of the Longhouse, a book about the Iroquois confederacy and how it dealt with the European factions that arrived in the Americas :

“[…] Champlain and a handful of French musketeers accompanied an army of Algonquins and Montagnais to somewhere near Ticonderoga, north of present-day Albany, to do battle with his native allies’ enemies, the Mohawks.  That hostile encounter was probably the first time [1609] an Iroquois had laid eyes on a European, but it certainly would not be the last (51).”

The French soldiers were essentially mercenaries at this point in time, and albeit mercenaries that had the blessing of the Crown.  Further along in the book, Richter writes on Iroquois slavery practices: Continue reading →

Quick Question

Brandon Christensen Books, History , ,

I was hoping somebody out there could answer for me. Why is Ludwig von Mises such a bad ass? From the foreign policy section of Liberalism:

The right of self-determination works to the advantage only of those who comprise the majority. In order to protect minorities as well, domestic measures are required, of which we shall first consider those involving the national policy in regard to education.

In most countries today school attendance, or at least private instruction, is compulsory. Parents are obliged to send their children to school for a certain number of years or, in lieu of this public instruction at school, to have them given equivalent instruction at home. It is pointless to go into the reasons that were advanced for and against compulsory education when the matter was still a live issue. They do not have the slightest relevance to the problem as it exists today. There is only one argument that has any bearing at all on this question, viz., that continued adherence to a policy of compulsory education is utterly incompatible with efforts to establish lasting peace.

The inhabitants of London, Paris, and Berlin will no doubt find such a statement completely incredible. What in the world does compulsory education have to do with war and peace? One must not, however, judge this question, as one does so many others, exclusively from the point of view of the peoples of Western Europe. In London, Paris, and Berlin, the problem of compulsory education is, to be sure, easily solved. In these cities no doubt can arise as to which language is to be used in giving instruction. The population that lives in these cities and sends its children to school may be considered, by and large, of homogeneous nationality. But even the non-English-speaking people who live in London find it in the obvious interest of their children that instruction is given in English and in no other language, and things are not different in Paris and Berlin.

However, the problem of compulsory education has an entirely different significance in those extensive areas in which peoples speaking different languages live together side by side and intermingled in polyglot confusion. Here the question of which language is to be made the basis of instruction assumes crucial importance. A decision one way or the other can, over the years, determine the nationality of a whole area. The school can alienate children from the nationality to which their parents belong and can be used as a means of oppressing whole nationalities. Whoever controls the schools has the power to injure other nationalities and to benefit his own.

I’m going to keep reading (you should too) and hopefully write up a little sum-sum about what I’ve learned soon.