- Permanent War versus Peace; Professor Angelo Codevilla elaborates
- Law professor at Fordham deceptively carries on the tradition of censorship-cheerleading; Ken White elaborates (Senior Editor Warren Gibson has also touched on this before)
- What if Mengele cured cancer? Bryan Caplan (who else?) asks the question
- Another law professor from Fordham, Nicholas Johnson, has a great post on The Bad Gun Dumpster
- Negroes and the Gun: Non-violent Winchesters and the fine art of concealed carry in the modern civil rights movement; Another, newer post by Mr Johnson elaborating upon one of the concepts in his new book
Current Events
Another Belated Warm Welcome
Readers have been enjoying Rick’s contributions for a while, but I just realized I haven’t formally introduced him yet. So finally:
Rick Weber received his B.S. in economics at San Jose State University and his M.S. in economics at Suffolk University, where he is currently working on his Ph.D. He is fascinated by the beauty of spontaneous order, and constantly astounded by the inexpressible wealth bestowed on him by the division of labor.
I met Rick at an IHS summer seminar waaaaay back in 2009. He was the toast of the town back then, and I’m really stoked that he’s blogging with us here at the consortium. Scroll through his musings. You won’t be disappointed. He also kicks it with the Free Market Institute gang at Texas Tech.
A Belated Warm Welcome
Readers,
Allow me to introduce notewriter Matthew Strebe to the team:
Matthew Strebe is a senior undergraduate student at the University of California in Santa Cruz, double majoring in Philosophy and Classical Studies. His areas of interest include political and ethical theory from antiquity to the present, particularly concerning the pre-Socratic philosopher Heraclitus and the classical philosopher Aristotle, along with the modern philosophers Kant, Schopenhauer, Nietzsche, and Heidegger. He considers political labels unnecessarily stifling, and contrary to a spirit of open exchange and inquiry, but nonetheless will provide a few: he is a member of Young Americans for Liberty, a registered libertarian, with viewpoints that are conservative to some and liberal to others. If you really want to know what he thinks, it is best to ask.
His debut post can be found here, and his most recent post is here. Please join me in giving him a warm welcome, and – as our small community is apt to do – be sure to keep him on his toes in the ‘comments’ section.
A Zoo in the Streets
A couple of years ago the kind of youngish women who spend two hours a day seven/seven at the beach starting showing up in the streets in tights, with nothing on top. Before I could catch my breath, the same streets were turned into zoos. I mean women who don’t spend two hours a day at the gym, or an hour a week, began joining the fad. Then, it was camels on one side (camel toes, actually), hippopotamuses on the other side.
The total horror! It makes you wonder if American women have any real girlfriends, friends close enough to say, “Don’t do it honey,” or boyfriends men enough to say, “Who do you think you are going with in this outfit, honey?”
I am almost sure this does not happen in France because French women have mean girlfriends.
I have been neglecting this blog because I am busy with the nth proofing of my manuscript: I Used to Be French: An Immature Autobiography. I will be back soon, I think.
О российском телеканале “Дождь”, особом пути, менталитете и памяти
Привет, друзья. Сегодня хочу вам рассказать одну неприятную историю, которая приключилась с российским телеканалом “Дождь”. Историю, замешанную на патриотизме, особом “русском пути”, памяти и банальном незнании истории.
Для начала давайте вернемся в нашей памяти на 70 лет назад во время Второй Мировой Войны и вспомним такое жуткое событие, как блокада Ленинграда, длившаяся почти 900 дней, и ставшая причиной голода и смерти сотен тысяч мирных жителей. Доподлинно известно, что у Гитлера было несколько планов на будущее города Ленинграда. Первоначально он планировал просто захватить город, потом же принял решение о полном уничтожении “Северной Венеции”. Стереть город с лица земли любым способом, не заботясь о мирном населении… Не ввязываясь в кровопролитные уличные бои, практически единственный способ сделать это – организовать полную блокаду и бомбежки. Тогда те, кто не умрут при артобстреле – умрут от голода. Я не буду сейчас рассказывать про беспрецедентные случаи человеческого мужества и верности Отечеству, которые проявили обычные горожане, и сразу перейду к смыслу: Гитлер не планировал сохранять нынешний Санкт-Петербург вообще. Любой ценой.
Недавно на одном из наших телеканалов появился опрос примерно следующего содержания: “Надо ли было сдавать город Ленинград врагу и тем самым избежать сотен тысяч смертей от голода, или же надо было защищаться до конца?” Из всего того, что я написал выше, ответ очевиден: сдача города врагу не сохранила бы ни его население, ни собственно сам город.
Перед нами обыкновенное незнание определенных фактов истории администрацией канала, ну или тем, кто отвечает за наполнение эфира информацией. Опрос этот вызвал широкий общественный резонанс, и вскоре был удален, а администрация канала извинилась.
Казалось бы, и забыть про это все надо – но нет. Отдельная категория людей, заседающих в нашем правительстве решила дать этому “вопиющему и кощунственному делу” дальнейший ход и написала заявление в прокуратуру, хотя по факту-то проблемы уже и нет. Однако канал начали везде закрывать и блокировать, и это лишний повод задуматься.
Что из всего этого лично я вынес? Существуют определенные события, категории знаний, факты и вообще “всякие понятия”, ошибки в которых недопустимы не при каких обстоятельствах. Не несущие никакого материального вреда, они могут оказаться бомбой замедленного действия в умах граждан, и вызвать совершенно непредсказуемую реакцию…
Думайте о том, что говорите, и о том, что пишете. Анализируйте свои слова и взвешивайте каждое слово.
New issue of Econ Journal Watch is out
You can find it here, and here is the summary:
One Swallow Doesn’t Make a Summer: In a 2014 AER article, Zacharias Maniadis, Fabio Tufano, and John List grapple with the problem of the credibility of empirical results by presenting a framework for statistical inference. Here Mitesh Kataria discusses some of the assumptions and restrictions of their framework and simulation, suggesting that their results do not, in fact, allow for general recommendations about which inference approach is most appropriate. Maniadis, Tufano, and List reply to Kataria.
Should the modernization hypothesis survive the research of Daron Acemoglu, Simon Johnson, James Robinson, and Pierre Yared? New evidence and analysis is provided by Hugo Faria, Hugo Montesinos-Yufa, and Daniel Morales, supporting the hypothesis that there is a long-run positive relation between socio-economic development and political democracy.
Ill-Conceived, Even If Competently Administered: In a 2013 JEP article, Stuart Graham and Saurabh Vishnubhakat argue that the Patent and Trademark Office (PTO) is doing a good job of interpreting patent law, and suggest that the “smart phone wars” and related disputes are not evidence that the patent system is broken. Here Shawn Miller and Alexander Tabarrok argue that the main problem is not with the PTO but with patent law as it has been applied, particularly to software, resulting in patents that are overly broad and ambiguous, and hence vexing and stifling.
Ragnar Frisch and Norway: Arild Sæther and Ib Eriksen contend that for several decades bad policy derived in part from the climate of opinion among the country’s eminent economists.
The ideological evolution of Milton Friedman: Lanny Ebenstein explores developments in Friedman’s thinking, particularly after the mid-1950s.
EJW Audio: Lanny Ebenstein on Milton Friedman’s Ideological Evolution
I might add that notewriter Fred Foldvary is an Editor for the journal, and notewriter Warren Gibson is its math reader, so give the newest issue some family love!
The State of the Union and the State of our Liberties
Nevertheless it is important not to fall into the delusion that President Obama presents the greatest danger to the culture of liberty. A historian looking back a hundred years from now is likely to group the Reagan, Bush I, and Clinton presidencies together as an era when the state receded or at least did not grow, as measured by regulatory and fiscal burdens on our lives. But Bush II relentlessly increased domestic spending and created more government involvement in health care with the Medicare D program for prescription drugs. It was President Bush who initiated many of the NSA programs.
In short, there are more similarities between Bush II and Obama than their supporters or detractors care to acknowledge. And almost all of the similarities suggest that the risks to our liberty today transcend the actions of any particular politician.
From John McGinnis. Read the rest.
UK considering long prison terms for file sharers
https://torrentfreak.com/uk-considers-throwing-persistent-internet-pirates-in-jail-140123/
Up to ten years in fact. While there is debate in the libertarian community over intellectual property laws I think that I would be hard pressed to find many libertarians that think downloading a movie should put an “offender” in prison for a similar amount of time as stealing a car.
Is China running out of cash?
China Halts Bank Cash Transfers
“The People’s Bank of China, the central bank, has just ordered commercial banks to halt cash transfers.”
Could we be seeing the start of total economic collapse? The answer, ceteris paribus, is yes and the Austrian Business Cycle Theory (ABCT) explains why.
To quote Ludwig Von Mises’ explanation of the final act of the ABCT:
“Ludwig von Mises stated that the “crisis” (or “credit crunch“) arrives when the consumers come to reestablish their desired allocation of saving and consumption at prevailing interest rates.[12][“
This means that when consumers finally realize that the money they have invested has actually been malinvested in the economy they then seek to acquire as much of their money as possibly from said investments. Most of which take the form of bank deposits.
The linked article reminds us that this is the numerous such time that China has adopted this policy saying:
“So what’s really going on? This crunch follows similar incidents in June and December of last year. In June, for instance, the central bank used the excuseof a “system upgrade” to allow banks to shut down their ATMs and online banking platforms. As a result, they conserved cash and thereby avoided a nationwide meltdown.”
Other instances, such as this one in England where “[s]ome HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it,” show that this problem may not be contained to China and may be spreading to the international market.
What does Murray Rothbard say will happen when this “credit crunch” inevitably occurs?
Wasteful projects, as we have said, must either be abandoned or used as best they can be. Inefficient firms, buoyed up by the artificial boom, must be liquidated or have their debts scaled down or be turned over to their creditors. Prices of producers’ goods must fall, particularly in the higher orders of production—this includes capital goods, lands, and wage rates […]
this means a fall in the prices of the higher-order goods relative to prices in the consumer goods industries. Not only prices of particular machines must fall, but also the prices of whole aggregates of capital, e.g., stock market and real estate values. In fact, these values must fall more than the earnings from the assets, through reflecting the general rise in the rate of interest return […]
“Since factors must shift from the higher to the lower orders of production, there is inevitable “frictional” unemployment in a depression, but it need not be greater than unemployment attending any other large shift in production. In practice, unemployment will be aggravated by the numerous bankruptcies, and the large errors revealed, but it still need only be temporary […]
Another common secondary feature of depressions is an increase in the demand for money. This “scramble for liquidity” is the result of several factors: (1) people expect falling prices, due to the depression and deflation, and will therefore hold more money and spend less on goods, awaiting the price fall; (2) borrowers will try to pay off their debts, now being called by banks and by business creditors, by liquidating other assets in exchange for money; (3) the rash of business losses and bankruptcies makes businessmen cautious about investing until the liquidation process is over.
With the supply of money falling, and the demand for money increasing, generally falling prices are a consequent feature of most depressions. A general price fall, however, is caused by the secondary, rather than by the inherent, features of depressions.
So is the massive failure of all economies imminent? Well not necessarily because the government can take some steps to prevent the immediate failure.
“Continually expanding bank credit can keep the borrowers one step ahead of consumer retribution (with the help of successively lower interest rates from the central bank). In the theory, this postpones the “day of reckoning” and defers the collapse of unsustainably inflated asset prices.[12][14] It can also be temporarily put off by price deflation or exogenous events such as the “cheap” or free acquisition of marketable resources by market participants and the banks funding the borrowing (such as the acquisition of land from local governments, or in extreme cases, the acquisition of foreign land through the waging of war).[15]
The “false” monetary boom ends when bank credit expansion finally stops – when no further investments can be found which provide adequate returns for speculative borrowers at prevailing interest rates”
These steps only “kick the can down the road” and delay the inevitable since “the longer the “false” monetary boom goes on, the bigger and more speculative the borrowing, the more wasteful the errors committed and the longer and more severe will be the necessary bankruptcies, foreclosures and depression readjustment.”
We may be seeing the beginning of the next great depression here but only time will tell. One thing is certain though, a massive economic readjustment is coming and the central banks of the world have only been aggravating the problem. When it will hit is anyone’s guess but in this author’s opinion we are either looking at a repeat of the early 30’s or a repeat of the early 40’s and I can only hope we can avoid going through both.
Around the Web
- Reading Tocqueville in Qatar and at Georgetown
- Colonialism and Anti-Colonialism: Blame Nationalism for Both
- The Issue of Selective Prosecution
- Eric Prince: Out of Blackwater and into China; The WSJ‘s weekend interview with the founder of Blackwater is particularly good. If you hit a paywall, just copy and paste the title and enter it into your Google search bar. Click on the first link and voila.
- A short history of economic anthropology (grab a cup of coffee first)
- The market may be colorblind, but politics isn’t: Race, class and economic opportunity
Nice Weather, Female Exhibitionism, and Scientific Research
Something interesting happened in Santa Cruz the past two or even three weeks. (I write on January 25 2014.) Or rather, something did not happened that should have. (I am alert to the dog that did not bark, as in Sherlock Holmes.)
For a long time now in the winter of 2013-014, comments on the weather have been in the national news much more frequently than is usual.
It’s been rather warmer here in Santa Cruz this January than it usually is in the middle of August. The Japanese cherry tree across the street has even been fooled into blooming! Although it’s a small city, I think Santa Cruz is a world center for warmism and for climatism (also for organic foodism, for vegetarianism, for nutism – it means eating only nuts – for deadly bicyclism,* for primitive feminism, for obligatory lesbianism, for residual Trotskysm, for holistic medicine, and perhaps also for holistic plumbing, I am not completely sure.)
Yet, yet, I never heard a peep through the local grapevine in the past few weeks about how the unseasonably warm weather was another proof of global warming. I only refer to the informal grapevine; I wouldn’t know if the local press had said anything. I don’t read it much; I have many unimportant things to do.
I have two explanations for this apparent surprising silence, one pretty sure, one tentative.
First, warm weather in January puts people in a good mood, even in California, even if they don’t want to be in a good mood. For one thing, the young women were walking around for days with the smug little look of nearly all women, everywhere, who get to show a bit of skin at a completely unexpected time. Their ebullient mood is catchy. The young men appreciate though they have been taught to avert their eyes lest they be accused of visual rape. The old guys frankly stare and smile, trying to remember why they do. (I know wherewith I speak!) The older women don’t seem to mind; it brings back warm memories, I would guess.
How about this: The strength of a national feminist movement is inversely correlated with mean winter temperatures?
My second, and tentative hypothesis about the lack of sententious comments about the warm weather in California is that ordinary people have finally caught on: You cannot argue that unexpectedly high temperatures in one fifth of the country are proof of global warming while maintaining that unprecedented low temperatures, at the same time, in three fifth of the countries do not contradict this view. You can’t have it both ways.
Of course, there is that other, newer beast, “climate change.” It goes like this:
If it’s warmer than usual, it’s because of man-made greenhouse gases. If it’s colder, it’s because of man-made greenhouse gases.
I laugh, I laugh stupidly but I could actually see this kind of argument made in a legitimate manner. You could try to show oscillations around a baseline. The baseline would have to be fixed. You couldn’t chose another baseline every time you did not like the weather facts. You would have to show that the oscillations have greater amplitude than was/is the case in some other test period or place (planet?). The greater amplitude oscillations would have to last for some reasonable period (not six years, for example). Finally, you would have to make a credible effort to show that high-magnitude oscillations are causally linked to greenhouse gas emissions. You couldn’t simply show two graphs looking a little bit alike and beginning and ending at times of your convenience, for example.
You would also have to publish prominently all the results of well designed research that indicated no greater oscillations than usual or no link between greater oscillations and the magnitude of man-made greenhouse gas emissions. Honestly, you would also have to explain which man-made emissions do what: car exhausts, air pollution from nuclear plants, cattle belches. (The seconds don’t exist, I am just toying with your minds; the third is not a joke at all; look it up.)
Note that I did not use at all the word “proof.” A reasonably objective demonstration satisfying all the above would give this denier pause. Also, climate scientists who, I am told, overwhelmingly “believe” in climate change would have to make an creditable effort to stop the irresponsible media bullshit spread every day in their names. (More on the last point another day soon.)
Not much to ask and a tall order!
* See my piece “Global Warming and Child Sacrifice” at Facts Matter
Creative Destruction in the Levant
Creative destruction ain’t just a place for the marketplace, baby! The National Interest has an article out by Mark Donig on “The Twilight of Sykes-Picot.” It’s a great piece that basically acknowledges the end of an era (European imperialism and cartographic arrogance), and what this will mean for the United States.
Sykes-Picot is an agreement between France and Great Britain that divided the Ottoman Empire up between the two after World War I (the article goes into a bit more detail if you’re interested). Russia was also a part of the negotiations for carving up Europe’s sick man, but after the Bolsheviks seized power all imperial pretenses associated with the West were abandoned in Moscow. European cartographers abandoned the Ottoman approach (learned over centuries of trial and error) to governing territories in the Levant and instead carved up the region as they saw fit. The end result was, of course, a number of states that could only be held together by a strong man. Today, these post-colonial states are collapsing and in their place are a greater number of pseudo-states.
In many of these pseudo-states, Islamists run the show. Donig, an international law student, is worried that if states like Syria and Iraq collapse, the chemical and biological weapons stockpiled in secret locations will fall into the wrong hands. Donig’s suggestion is that the US pay very close attention to what is happening in the Levant, but I think he is much too pessimistic.
The US should embrace political disintegration in Levant wholeheartedly. Doing so would mean recognizing sovereignty of nasty-looking regimes. Yet is would also end the power struggles for the “center” in Sykes-Picot states, which would in turn end the reign of strong men in the region for good (for a concise explanation on why strong men emerge in post-colonial states, see “Imperialism: The Illogical Nature of Humanitarian Wars“).
Were the US to embrace decentralization in the Levant, it would be wise for Washington to play an active role implementing trade agreements both between the new states as well as with Washington. The separatist movements in Scotland and Catalonia illustrate my garbled point well. Scots and Catalonians don’t want independence without membership into the international trading confederation known as the EU, and membership in an international confederation requires relinquishing some sovereignty (Daniel Larison inadvertently makes this point here; people on both the Left and Right who point to evils of EU rarely acknowledge that many states and regions would love to be a part of this confederation, warts and all, and that they stake their very separatist claims on such a membership).
Trade agreements would play an integral role in making or breaking these new states within their newly decentralized region (see Becker or yours truly on the importance of trade in politically fragmented regions). Once recognizing sovereignty of new states, the US would gain some much-needed trust from the peoples of these new states, and then Washington could use that influence to push for more economic integration (between the new states and with the new states) while at the same time recognizing the reality of political fragmentation in the region.
At any rate, full-on American diplomacy in this area is a must, especially given the TNI report’s account of possible chemical weapons stockpiles. This is something the US could work with Russia on, thus building a measure of trust which could, in turn, be used to work with Moscow elsewhere (especially in Europe). It still surprises me that dovish policymakers in Washington and Moscow have not yet used their respective government’s mutual enemy (Islamism) to build much-needed bridges between the two countries.
Myths about Libertarianism
Many articles have recently appeared in magazines, web sites, and social media criticizing free markets and libertarian ideas. It seems to me that this opposition is a result of a growing interest in freedom as people realize that the economies of the world are in serious trouble. As people see continuing high unemployment, slow growth, ever greater government debt, environmental disaster, more turbulent weather, and endless wars, some folks seek solutions in greater freedom while others seek solutions in greater state control. The critics of libertarianism and economic freedom have fallen for several fallacies.
1. Critics confuse today’s mixed economies, a mixture of markets and government intervention, with a “free market.” A truly free market is an economy in which all activity is voluntary for all persons. Government intervention changes what people would otherwise voluntarily do. A pure market would not impose the taxation of labor and capital. It would not prohibit trade with Cuba. Free markets would not subsidize industry. Any peaceful and honest action would be free of restrictions and taxes. That is not the economy we have today in any country.
2. Critics use the term “capitalism” to falsely blame markets for economic trouble. Those opposed to private enterprise call today’s economies “capitalist.” They then note that the economy has trouble such as poverty, great inequality, unemployment, and recessions. The critics conclude that “capitalism” causes these problems. This illogic uses a sly change in meaning. They use the term “capitalism” as a label for the current economies and also to refer to free markets. It makes no sense to label the economy as XYZ and then say XYZ causes problems. The critics use the double meaning of “capitalism” to blame the non-existing free market for social problems. This confusion is often deliberate, as I have found that it is almost impossible to get the critics to replace their confusing use of the term “capitalism” with clearer terms such as either the “mixed economy” or the “pure market.”
3. Critics think that the “market” means “anything goes.” For example, they think that a free market allows unlimited pollution. They often call this, “unbridled capitalism.” But freedom stops at the limit of harm. In a pure market with property rights for all resources, pollution that crosses outside one’s own property is trespass and invasion. This violation of others’ property rights would require compensation, and that payment would limit pollution.
4. Critics confuse privatization with contracting out. They then blame private enterprise for problems such as occurs with private prisons. When government contracts with private firms to produce roads, it is still a governmental road. When governments hire private contractors to provide services in a war, it is still government’s war. Government sets the rules when firms do work under contract. Genuine privatization means transferring the whole ownership, financing, and operation to a private firm.
5. Critics overlook subsidies. Government distorts the economy with subsidies to agriculture, energy production, and other corporate welfare. The biggest subsidy is implicit: the greater land rent and land value generated by the public goods provided by government and financed mostly from taxes on labor and enterprise. Critics not only ignore this implicit subsidy but also overlook the explicit subsidies to agriculture and programs such as the promotion of ethanol from corn.
6. Critics do not understand the crowding out of private services because of government programs. The critics of libertarianism say that with less government, old folks and poor folks would starve and die because they would not receive social security and medical care. What they overlook is that the reason many of the elderly have little savings for retirement is that government took away half their income while they were working. Income taxes reduce their net wages, while sales taxes raise the cost of living. Low-income people pay little or no income tax, but they pay hefty sales and excise taxes, and they indirectly pay property taxes from their rental payments to landlords. Libertarians want to abolish poverty and have a society where all people have good medical care. They just want to accomplish this by letting workers keep their full pay, which would enable them to pay for their own medical services. Also, with no taxes on interest and dividend income, people would be better able to provide for their own retirement income, indeed to have much more than social security now provides.
7. Critics fail to understand contractual governance. A pure market would not consist of isolated individuals. Human beings have always lived in community associations. In a free market, communities such as condominiums, land trusts, and civic associations would provide the public goods that the members want.
8. The critics of market believe that corporations control the economy, exploit labor, and plunder the planet. Corporations do have power, but mainly because they obtain subsidies and monopoly privileges from governments. But labor unions and lawyers also lobby the government for power and favors. Rather than blaming private enterprise, the critics should examine how the structure of government enables special interest to obtain power and wealth.
Leo Tolstoy wrote in 1905 that nobody really argues with the economics and philosophy of Henry George and public revenue from land rent; the critics either misunderstand the concepts, or they create misinformation. The same applies to critics of libertarianism. The fact that the critics falsify the free market in criticizing it implies that the actual concept is sound, otherwise they would provide valid arguments.
Nobody has refuted the free market and the libertarian ethic of “live and let live”. The critics of liberty either misunderstand it or else falsify it. Even when their errors in logic, their false evidence, and their confused terminology are pointed out, the critics persist in their falsification. They are stubbornly anchored to their viewpoints. Why this is so is a problem I will leave to psychologists to figure out.
Around the Web
- Recent Mexican reforms and the impact on the United States. From Gary Becker.
- Is the Pope’s Capitalism Catholic? Read this for the concise history lesson on Argentina rather than for the Pope’s opinion about public policy.
- Sandy Ikeda asks: Who is really threatened by innovation? Rick’s recent musing on political entrepreneurs can also shed some light on Ikeda’s question.
- The Liberty Constitution, Or, What About Slavery? Some libertarian legal theory for dat ass.
- “Diplomacy.” A transcript of Rand Paul’s recent speech on US foreign policy.
- Why the world needs more globalization, not less.
David Theroux’s latest on Secular Theocracy, Part 2
“Duck Dynasty and the Secular Theocracy, Part 2”
Part 1 can be found here. For more Secular Theocracy as a concept, start here. David founded the Independent Institute, a highly-regarded think tank in the San Francisco Bay Area. In the summer after my first semester of college (2009; I started college in Feb of 2009 after hanging out in Ghana – long story!) I had the opportunity to attend the Independent Institute’s summer seminar for students.
In fact, that summer I attended four seminars put on by various libertarian think tanks and the Institute’s was the first of the summer. I really, really enjoyed it and was able to make some lifelong connections. For example, Dr Foldvary – the co-founder of this blog – was one of the lecturers there. Here is the Institute’s main web site.
