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Reformed Libertarian Blog Posts

Governance Is Not Arbitrary

One misconception among Christians today, is that the government would have the authority to criminalize certain actions by fiat. The problem however, is that there is no Biblical justification granting governing authorities an arbitrary basis for punishing or restraining evil. If anything, the basis is definitive (as opposed to arbitrary), but many Christians by and large have failed to come to this realization and only decry government actions if they’re unmistakably egregious.

Moreover, the distinction between vices and crimes[1] should not vary from person to person, nor from governing authority to governing authority because governing authorities are people no different than you and I. This means they are held to the same ethical standard.

Perhaps the most important distinction to make is that the sin of a man does not always necessarily entail physical restitution nor punishment; particularly when there is no physical offense committed against another person or another person’s property. Sure, there is a metaphysical aspect regarding all sin, but God is the only one who has the right to decide the means of expiation, especially when transgressions are committed solely against Him.

It is when a sin becomes criminal — viz. when a sin is an encroachment upon the property of another, including acts of aggression against the victim’s person — that man has legal grounds on which to take punitive action or to exact restitution. This is confirmed by the fact that the Proprietor of all creation has delegated subsidiary ownership of property to each individual human, as indicated by certain provisions of His Law pertaining to actions and choices of man vis-à-vis other men. These prohibitions include the act of murder, stealing, and certain types of false witness (e.g. aggression, theft, extortion, perjury, and breaking of contracts).

Unless otherwise stated by God in His Word (e.g. specific commands to Old Testament Israel), man has a default code of conduct to which he is to adhere. When Christians make allowances for others — especially governing authorities — to negate any portion of this standard, then we make allowances for all men to negate all portions of this standard which is a position entirely hostile toward God.

 

[1] In Lysander Spooner’s work, Vices Are Not Crimes, Spooner defines vices as, “those acts by which a man harms himself or his property” and crimes as “those acts by which one man harms the person or property of another.”

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Consumption Tax?

Part of Gary Johnson’s tax reform plan is implementation of a national sales tax, what he calls a consumption tax, while he repeals all income tax.

However, a national sales tax is an income tax which not only reduces consumption but also savings and investment. As Rothbard states on pages 1161-1162 in Man, Economy, and State with Power and Market:

“It should be carefully noted that the general sales tax is a conspicuous example of failure to tax consumption.  It is commonly supposed that a sales tax penalizes consumption rather than income or capital.  But we find that the sales tax reduces, not just consumption, but the incomes of original factors.  The general sales tax is an income tax, albeit a rather haphazard one, since there is no way that its impact on income classes can be made uniform. Many “right-wing” economists have advocated general sales taxation, as opposed to income taxation, on the ground that the former taxes consumption but not savings-investment; many “left-wing” economists have opposed sales taxation for the same reason.  Both are mistaken; the sales tax is an income tax, though of more haphazard and uncertain incidence.  The major effect of the general sales tax will be that of the income tax: to reduce the consumption and the savings-investment of the taxpayers.  In fact, since, as we shall see, the income tax by its nature falls more heavily on savings-investment than on consumption, we reach the paradoxical and important conclusion that a tax on consumption will also fall more heavily on savings-investment, in its ultimate incidence.”

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John Hersey and the Human Cost of Hiroshima

In August of 1946, as Americans celebrated the one-year anniversary of the end of World War II, The New Yorker magazine devoted an entire weekly edition to the remembrance of one of that war’s final events, the atomic bombing of the Japanese city of Hiroshima. The magazine, which would typically have featured several articles by different writers, instead devoted its August 31, 1946 edition to one extended article by journalist John Hersey, who had been one of the first Western journalists into Hiroshima after the bombing. Hersey’s article focused on six survivors – among them a Methodist minister and German Catholic priest – of the Hiroshima blast.

Without editorial comment, Hersey detailed the experiences of these six survivors and painted a horrifying portrait of the human cost of the atomic bombs. One passage, detailing Reverend Kiyoshi Tanimoto’s efforts to save the dying and aid the wounded, was particularly heart-wrenching:

“Just before dark, Mr. Tanimoto (a Methodist minister) came across a twenty-year-old girl, Mrs. Kamai, the Tanimotos’ next-door neighbor. She was crouching on the ground with the body of her infant daughter in her arms. The baby had evidently been dead all day. Mrs. Kamai jumped up when she saw Mr. Tanimoto and said, “Would you please try to locate my husband?”

“Mr. Tanimoto knew that her husband had been inducted into the Army just the day before… Judging by the many maimed soldiers Mr. Tanimoto had seen during the day, he surmised that the barracks had been badly damaged by whatever it was that had hit Hiroshima. He knew he hadn’t a chance of finding Mrs. Kamai’s husband, even if he searched, but he wanted to humor her. “I’ll try,” he said.

“’You’ve got to find him,” she said. “He loved our baby so much. I want him to see her once more.’”

So moving was Hersey’s account that Time magazine editorialized,

“Every American who has permitted himself to make jokes about atom bombs, or who has come to regard them as just one sensational phenomenon that can now be accepted as part of civilization, like the airplane and the gasoline engine, or who has allowed himself to speculate as to what we might do with them if we were forced into another war, ought to read Mr. Hersey.”

Having just passed the 71st anniversary of the bombing (and a contested half apology from the United States’ current Bomber in Chief), it seems that John Hersey’s mostly-forgotten work is due for a resurrection. His story may not change anyone’s position on whether or not the bombs should have been dropped, but it would at least remind Americans of what the bombings actually represent.

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On the Alt-Right Scare: Who Cares

Here’s the deal. Hillary dismissed Trump and his base as a bunch of Alt-Righters. This was smart. She’s a good politician. She was playing a classic strategy of taking a teeny tiny group that pretty much nobody likes or actually belongs to and dismissing all her opponents as belonging to that group. This is, as I said, classic. Once the booboisie hears that non-Hillary supporters are alt-right folks, Hillary’s achieved victory.

It’s the whole dismissing someone as racist or sexist thing simply for dissenting. It works. And politics is about pragmatism. Mencken observes:

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

But seriously who cares. Either Trump is good on liberty or he is not. He isn’t. There’s no need for libertarians to get caught up in the virtue signaling of fashionably ensuring that everyone knows how non-racist, non-sexist, anti-alt-right we are.

Congratulations, its 2016 and you’re against racism. I’m proud of you. So is everyone else. I love what Tom Woods wrote on the “taking a stand” on opinions with which 95% of people agree:

In light of recent libertarian showboating I have composed this couplet:

Hey, reporter, look at me
I’m against slavery!

It took a lot of courage to oppose slavery in, say, 1855. It takes zero courage to oppose it today. This is one reason I am convinced that those who are most ostentatious in their aversion to slavery in 2013 are the least likely to have opposed it at the time. Their excessive eagerness to disassociate themselves from perceived “extremism” would not have served them well in the 1850s, when abolitionism, which had zero electoral success, was the most notorious extremism of the day.

[…]

Unlike Kuznicki, I say things that go against the grain even though I know they will yield me nothing but grief. I hope this means I would have opposed injustice when it counted and when it might have done some good, and not just 150 years later, when I safely say what everyone thinks, to the applause of the world.

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Joe Sobran Breaks Down the Labels

If you want government to intervene domestically, you’re a liberal.bio-reduced.jpg

If you want government to intervene overseas, you’re a conservative.

If you want government to intervene everywhere, you’re a moderate.

If you don’t want government to intervene anywhere, you’re an extremist.

“Need” now means wanting someone else’s money.

“Greed” now means wanting to keep your own.

“Compassion” is when a politician arranges the transfer.

—Joe Sobran

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Welcome to the New Site!

Hurrah! The new site is up! Click here.

What do you think? Please know: it’s still a work in progress and I’m still adding features and making tweaks. So I know some of you are going to really have some major critiques. Please be nice. But I welcome feedback and suggestions.

Please click on at least one of the newest 4 articles when you get to the site to get a feel for how it looks.

A couple notes on the new structure of things:

The very biggest change is the main site where all the major articles and pages are hosted is now distinct from the blog. As you will find on the main site in the menu area (far right), “The Blog” takes you to the subdomain where the blog exists. Here’s the cool thing: each and every blog post feeds into the various pages on the main site in the sidebar section so if you visit the main site, you can still see all the blogposts; clicking it will just take you to the blog site. The blog site is blog.reformedlibertarian.com .

What is the difference between an article and a blog? An article is original content, developed arguments, and longer/more thought out material. The blog, on the other hand, will be shorter and mostly unelaborated. You will find links, memes, jokes, quotes, quick thoughts, and references to outside pieces.

The transition between the main site and the blog site is pretty seamless. You will hardly notice.

I’m still working on the photo sizes on the front page. So some of them may seem a little off. Just bear with me. I have lots of tweaks to do. The mobile site is very cool. The side menu option (the three lines on the upper right hand side) is available on both desktop and mobile. The primary menu is only seen on desktop, and it is just the major categories, plus a link to the blog site.

I am going to be putting all the major pages (i.e. The Reading List) in the side menu (three line thing) and leave the primary menu for the site’s categories (topics).

The biggest annoyance for me right now is the block quotes on the main site’s articles. The default formate is all capital letters. I am working to get this changed to cursive. So again, bear with me.

Any other suggestions or feedback is appreciated. Some of you may think the blog/site distinction is a little odd. But four things: 1) You’ll get used to it. 2) How cool is it that you can scroll straight down the blog page and it reads like a legit blog! 3). I had to do it this way with the way the main theme is in order to make a single tiny blogpost not look really weird on the site.

And #4: I have a couple really cool plans in store for the blog site that I am still working on. Stay tuned for that announcement!

I will be adding new features and cool designs all week. So keep checking back in. It’s not complete yet. But for the most part it’s ready to launch. So check it out.

And finally, thank you to all who contributed to this next step with a small donation. It is always helpful and shows me the kind of interest that exists for these types of resources. I’m always appreciative. Here is what I said yesterday on Facebook on this topic:

Hey everybody, time to do this again. Once a year, I do one round of extremely low pressure fundraising for some site expenses. Let me say the same thing I say every single time: there is nothing on the site that will be prevented if no one donates. I have the same hosting/domain/theme expenses I always do and I personally have the funds to pay everything. So it’s not like you would be keeping the site up. It’ll be up regardless.

However, the reason I do this is because I know many of you have benefitted from the site and may want to express yourself in this way. A few people per year do ask me if I need any help financially and I always tell them I don’t need help per se, but there are expenses and I am indeed honored to receive contributions.

My one big change that I am doing this month is –finally– getting a modern and beautiful theme all installed. A much better one than just the tinkering with the current one I’ve been doing off and on. You guys deserve it. It’s going to be legit. So anyways, besides the regular expenses, that’s what I’ll be spending money on this time around.

If you want to contribute, I’d be thrilled. Here is the link:

https://paypal.me/reformedlibertarian

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Trumped! New Stockman Book

David Stockman has announced a new book that is coming soon:

I am in the throes of finishing a book on the upheaval represented by the Trump candidacy and movement. It is an exploration of how 30 years of Bubble Finance policies at the Fed, feckless interventions abroad and mushrooming Big government and debt at home have brought America to its current ruinous condition.

It also delves into the good and bad of the Trump campaign and platform and outlines a more consistent way forward based on free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.

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The Cycle of Decivilization

The state artificially creates a variety of laws from fiat.

People inevitably break these laws.

The state uses its coercive power to enforce the law.

People get annoyed, some react with physical violence (unwise).

The state clamps down and gets more fierce.

This causes more blowback.

[fast forward decades]

Behold, the cycle continues. Hoppe’s theory of the decivilization effects of Democracy and public law is being proven correct.

More laws, more crime. More crime, more tension between state and people.

Some blame institutionalized racism. This is wrong. Racial disparity in the enforcement of artificial law does not itself logically imply racism (the theory that certain races are morally or biologically superior to others).

Others see zero guilt in the law enforcement and only consider them categorically as heroic. This is wrong. See above for the state’s role.

The state grows more powerful and more tyrannical as it becomes more desperate to maintain its beloved grasp on society. But this is a continuation of the spiral and feeds the careless and unthinking mob-like reaction. Back and forth it all goes.

Society collapses upon itself.

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Jim Hale’s Change of Heart

Yesterday I was so impressed by Jim Hale’s exclusive article over at the Ron Paul Institute wonderfully titled “Confessions of a War Propagandist,” that I also posted here on TRL. A major reason for my being impressed, of course, was because of who Jim Hale is. As the article states, Hale was the media relations director at the Committee of the Liberation of Iraq, a key influencer on behalf of the War Party’s efforts for regime change in Iraq. Hale worked closely with neocon head honcho Bill Kristol and their favorite advocate in the Federal Government: John McCain.

At any rate, today Tom Woods published Hale’s first interview since “confessing” his role in the deceitful and destructive efforts toward a completely unnecessary, unjustifiable, and unconstitutional war in Iraq. It was pretty fascinating. Apparently, Hale was one who knew Ron Paul was right in his understanding of the facts and the theory of the entire war effort, both in terms of the actual cause of the events and also in terms of the propaganda that was being promoted to drive the country toward war. But both in 2008 and 2012, Hale admits rejecting Paul’s arguments by rationalizing the very false narrative to himself until just this year when first Rubio and then Cruz quit the GOP race. At that point, Hale knew it was over and he “woke up one morning” and decided he was done.

He even cites his faith as a key motivator to his change of heart.

He literally stumbled onto Tom Woods’ site by accident, starting listening to the podcasts, bought a whole stack of the site’s recommended books to educate himself on the liberty philosophy (and no doubt on all the war-related podcasts Tom Woods has done). He even decided to give Ron Paul’s book The Revolution a chance. This was all a couple months ago, apparently. He messaged Tom Woods and recorded his first public reflection on the matter.

Completely remarkable. I mean this guy was at the very top of the propaganda efforts and here he is today, the weight of his lies finally off his chest, ready and willing to dig into the liberty movement’s resources and  open up about his change of heart. We always like the dream of the day when an “insider” will finally come clean about the corruption and lies that go on, to expose himself and his colleagues and to tell the truth about what they are doing. It’s been done before, but this truly is a great moment.

Here is the interview, give it a listen!

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FedGov and Statist Christian

The role of the Federal Government is to make up laws out of thin air and then convict people and businesses who happen to fall short of the arbitrary, often socially and economically harmful, standard.

The role of the statist evangelical Christian who lacks a coherent political theory is to praise the Federal Government for upholding “law and order” and stigmatize the person/business for acting “illegally.”

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Robert Higgs on Minimum Wage Studies

From his Facebook page:

Suppose you wanted to know how many of the soldiers who served in World War II were killed in that war. So you sent inquiries to a random sample of veterans of that war, asking: were you killed in the war? I presume that all of those who responded to the survey would reply, no. Having conducted your scientific poll, you could then conclude that none of the soldiers who participated in World War II were killed.

The mistake you would have made in this case is known as the result of survivorship bias. It affects many sorts of studies, including many where the study design is not so obviously stupid as in my foregoing example. Surveys have sought, for example, to determine how an increase in the legal minimum wage affected employers’ amount of.employment. Such a forced wage increase, especially if it were a large one, might well cause some firms to go out of business. They would then be unavailable to respond to a poll or other survey to indicate that the increased minimum wage had caused them to reduce their employment to zero, wiping out however many jobs they had previously maintained.

You might think that any well-trained economist would be aware of survivorship bias and would not draw unwarranted conclusions by failing to take it into account in designing or conducting a study. But if you thought so, you’d be wrong. Mainstream economists, including super-duper econometricians, not uncommonly make this freshman mistake.

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Excerpt from Mises’ Biography

I like this first part of the preface of Mises: The Last Knight of Liberalism, brilliantly researched and written by Jorg Guido Hulsmann. It really captures Hulsmann’s appreciation for Mises, and touches on Mises’ contributions to the freedom philosophy.

IN THE SUMMER OF 1940, with Hitler’s troops moving through France to encircle Switzerland, Ludwig von Mises sat beside his wife Margit on a bus filled with Jews fleeing Europe. To avoid capture, the bus driver took back roads through the French countryside, stopping to ask locals if the Germans had been spotted ahead—reversing and finding alternative routes if they had been.1970023

Mises was two months shy of his fifty-ninth birthday. He was on the invaders’ list of wanted men. Two years earlier, they had ransacked his Vienna apartment, confiscating his records, and freezing his assets. Mises then hoped to be safe in Geneva. Now nowhere in Europe seemed safe. Not only was he a prominent intellectual of Jewish descent; he was widely known to be an archenemy of National Socialism and of every other form of socialism. Some called him “the last knight of liberalism.”

He had personally steered Austria away from Bolshevism, saved his country from the level of hyperinflation that destroyed interwar Germany, and convinced a generation of young socialist intellectuals to embrace the market. Now he was a political refugee headed for a foreign continent.

The couple arrived in the United States with barely any money and no prospects for income. Mises’s former students and disciples had found prestigious positions in British and American universities (often with his help), but Mises himself was considered an anachronism. In an age of growing government and central planning, he was a defender of private property and an opponent of all government intervention in the economy. Perhaps worst of all, he was a proponent of verbal logic and realism in the beginning heyday of positivism and mathematical modeling. No university would have him. Margit began to train as a secretary.

Over the next decade, they would slowly rebuild and Mises would find new allies. He would also publish his most important book, Human Action. It would earn him a following whose admira- tion and devotion were beyond anything he had known in Europe.

When he died in October 1973, he had only a small circle of admirers and disciples, but this group became the nucleus of a movement that has grown exponentially. Today his writings inspire economists and libertarians throughout the world, and are avidly read by an increasing number of students in all the social sciences. There is an entire school of “Misesian” economists flourishing most notably in the United States, but also in Spain, France, the Czech Republic, Argentina, Romania, and Italy. This movement is testimony to the lasting power and impact of his ideas.

The purpose of the present book is to tell the story of how these ideas emerged in their time. It is the story of an amazing economist, of his life and deeds. It is the story of his personal impact on the Austrian School and the libertarian movement. It is above all the story of a man who transformed himself in an uncompromising pursuit of the truth, of a man who adopted his ideas step-by- step, often against his initial inclinations.

Once a student of the historical method in the social sciences, he would become the dean of the opposition Austrian School and humanistic social theory. He went from left-leaning young idealist in Vienna to grand old man of the American Right. Dismissive of “the metallists” early in his career, he became an unwavering spokesman for a 100 percent gold standard. His example inspired students and followers, many of whom would take his message and method farther than he himself would go.

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H.L. Mencken on Envy and Democracy

Mencken:

No doubt my distaste for democracy as a political theory is, like every other human prejudice, due to an inner lack-to a defect that is a good deal less in the theory than in myself. In this case it is very probably my incapacity for envy.

That emotion, or weakness, or whatever you choose to call it, is quite absent from my make-up; where it ought to be there is a vacuum. In the face of another man’s good fortune I am as inert as a curb broker before Johann Sebastian Bach. It gives me neither pleasure or distress. The fact, for example, that John D. Rockefeller had more money than I have is as uninteresting to me as the fact that he believed in total immersion and wore detachable cuffs. And the fact that some half-anonymous ass or other has been elected President of the United States, or appointed a professor at Harvard, or married to a rich wife, or even to a beautiful and amiable one: this fact is as meaningless to me as the latest piece of bogus news from eastern Europe.

The reason for this does not lie in any native nobility or acquired virtue. Far from it, indeed. It lies in the accidental circumstance that the business I pursue in the world seldom brings me into very active competition with other men. I have, of course, rivals but they do not rival me directly and exactly, as one delicatessen dealer or or clergyman or lawyer or politician rivals another.

It is only rarely that their success costs me anything, and even then the fact is usually concealed. I have always had enough money to meet my modest needs and have always found it easy to get more than I actually want. A skeptic as to all ideas, including especially my own, I have never suffered a pang when the ideas of some other imbecile prevailed. […]

And there is only one sound argument for democracy, and that is the argument that it is a crime for any man to hold himself out as better than other men, and, above all, a most heinous offense for him to prove it.

What I admire most in any man is a serene spirit, a steady freedom from moral indignation, an all-embracing tolerance-in short, what is commonly called good sportsmanship. Such a man is not to be mistaken for one who shirks the hard knocks of life. On the contrary, he is frequently an eager gladiator, vastly enjoying opposition. But when he fights, he fights in the manner of a gentleman fighting a duel, not in that of a longshoreman cleaning out a waterfront saloon. That is to say, he carefully guards his amour propre by assuming that his opponent is as decent a man he is, and just as honest-and perhaps, after all, right. Such an attitude is palpably impossible to a democrat. His distinguishing mark is the fact that he always attacks his opponents, not only with all arms, but also with snorts and objurgations-that he is always filled with moral indignation-that he is incapable of imaging honor in an antagonist, and hence incapable of honor himself.

Such fellows I do not like. I do not share their emotion. I cannot understand their indignation, their choler. In particular, I can’t fathom their envy.

And so I am against them.

Taken from A Blind Spot from the Smart Set, 1920, pp.43-44

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A Wealthy Zuckerberg’s Sly Move

In our wealth management practice, there is an important reminder that we help some of our extremely wealthy clients to remember: it is better to be in control and not be an owner than to be an owner and have limited control.

What we mean by this is that there are certain legal disadvantages to personally owning something, including tax and inheritance implications. Among these “somethings” that can be owned is stock of a given company.

This is how we should view the recent hoopla surrounding Mark Zuckerberg’s announcement that he will be “giving away” 99% of his ownership in Facebook. The progressive left when berserk. “This is what the wealthy SHOULD be doing! Good for Mark!”

Here’s the deal: this is exactly what the wealthy should be doing indeed, and it is what I might advise (some) people to do (if their situation calls for it). Why? Because what he just did was to transfer the wealth from his own taxable control (ownership) to a new foundation that is controlled by– you guessed it– him. Now he still controls the wealth, but he does not own it; therefore, he will not be taxed on it. That’s right: capital gains tax on the transfer? Nope. Future estate taxes for his heirs? Nada. But what about a tax deduction for the donation? You bet!

Am I saying he shouldn’t be allowed to do this? On the contrary! He should indeed! We need these strategies to protect our wealth!

What should the wealthy person do to protect wealth from the state and from the masses who demand its redistribution? What should the wealth do as a strategy to preserve the long term integrity of his wealth? He should do what Zuckerberg just did. But won’t the media and the Progressive Left be super angry?? Not if you do it under the guise of giving away your wealth for future generations. Like Zuckerberg just did. Then they lavish praise on you!

Robert Wenzel comments on the matter:

Zuckerberg Announces He Is Going To Take His Money Out Of His Left Taxable Pocket and Put It Into His Right Non-Taxable Pocket

We may have our first full-fledged billionaire couple with child, who can most aptly be described as slogan Marxists. It doesn’t appear they have any deep knowledge of Marxism, or any other social theories, they are just sloganeers: “equality for all, especially future generations.”

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Interest Rates and the Strength of the Economy

Janet Yellen’s explanation for continuing the absurd trend of ZIRP (Zero Interest Rate Policy) was essentially that, while the Fed had hit its official unemployment level goals (for clarification, the reason for this is that the labor participation rate is at historically low levels and also because we are in a boom phase of the business cycle due to the expansion of the money supply, per the Austrian Business Cycle Theory.), the economy itself was not yet strong enough to withstand the beginnings of a raise in the Federal Funds rate.  The economy is still holistically too weak for the Fed to be comfortable with a 25 basis point uptick in the price of credit.

Richmond Fed President Jeffrey Lacker was the lone dissenting voice from this position. In his estimation, the economy is actually strong enough to take on the early stages of what must eventually be a long haul toward historically normal interest rate levels.

CONTINUE READING

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Matt McCaffrey Defends Misesian Economics

Matt McCaffrey defended Austrian economics against John Mueller’s odd claim (in the Quarterly Journal of Austrian Economics!) that there’s a missing element in Austrian economics; namely, that it cannot account for things like love because Austrian economics (especially Misesian economics), centered on the methodology of praxeology, which sees all human action as a result of self-interest. Stated differently, all human beings have ends that need to be satisfied and therefore they act; this action constitutes employing means to accomplish that end.

Mueller then, presupposing that love itself must not be self-interested, states that there is a missing element in Austrian economics. For in his eyes Austrian economics is limited to action stemming from self-interest.

I think Mueller’s claim is remarkably silly.  McCaffrey easily overcomes Mueller’s observation, first by stating Mueller’s example:

For example, a mother who feeds her child is not acting out of self-interest, but of love for her infant, which explains why she feeds her child rather than consuming all her food herself. According to Mueller, standard economic assumptions cannot account for either the mother’s loving behavior or her distribution of food to her child. Likewise, there are an enormous number of similar non-exchange behaviors that fall outside economic analysis. What is needed then is a thorough revision of theory to incorporate these missing actions, and this is what Mueller sets out to do.

Nevertheless, readers of Mises will perhaps see the difficulty with Mueller’s argument: praxeology suggests that all action is self-interested in that it tries to substitute a more for a less satisfactory state of affairs, from the point of view of the actor. Action is thus a kind of exchange, though not necessarily an exchange of goods and services. Rather, when a loving mother feeds her child, she exchanges the less desirable state of the child’s hunger for the more desirable state of the child’s nourishment. Taken this way, selflessness, or love, does not pose much of a problem for economic theory.

And actually, I think there is a much stronger defense of Mises’ praxeology than McCaffrey himself gives.  Beyond McCaffrey’s point, the fact remains that the mother actually is acting in self-interest (properly understood) in feeding her child.  And this is proven by the action itself! Every single act is a revelation of the value placed on a given means/ends relationship as considered by the human actor.  The mother does not feed her child even though she would rather feed herself; she actually feeds her child because she sees the act of feeding her child as bring her more satisfaction than the act of feeding herself.  In other words, she weighs the value, mentally, of the satisfaction that would be brought about in her mind by feeding herself, against the value of the satisfaction that would be brought about by feeding her child.  Praxeology explains why she acted in that way: her self-interest made her choose the option that would satisfy her more.

In a previous post, I quoted Jonathan Edwards:

A man never, in any instance, wills any thing contrary to his desires, or desires any thing contrary to his will.

…but yet his Will and Desire do not run counter all: the thing which he wills, the very same he desires; and he does not will a thing, and desire the contrary, in any particular.

[…]

And therefore I observe, that the Will (without any metaphysical refining) is, That by which the mind chooses any thing. The faculty of the will, is that power, or principle of mind, by which it is capable of choosing: an act of the will is the same as an act of choosing or choice.

[…]It is sufficient to my present purpose to say, It is that motive, which, as it stands in view of the mind, is the strongest, that determines the will. But may be necessary that I should a little explain my meaning. By motive I mean the whole of that which moves, excites, or invites the mind to volition, whether that be one thing singly, or many things conjunctly. Many particular things may concur, and unite their strength, to induce the mind; and when it is so, all together are as one complex motive. And when I speak of the strongest motive, I have respect to the strength of the whole that operates to induce a particular act of volition, whether that be the strength of one thing alone, or of many together.

And then I commented on Edwards:

If the will is the faculty that chooses, and the will cannot choose anything contrary to the desires, then it is impossible to conceive of a situation in which we don’t choose that which satisfies the chief desires of our heart.  Thus, to obey God without our minds considering this activity the most satisfying thing at the moment is an idea that runs contrary to the entire nature of man himself.  This is an anthropological consideration; can man distance himself from his desires?  Can he act contrarily to his own will?  Piper and Edwards say no, and to disagree seems to fly in the face of reason and consistency.

Indeed, Mises economic theory does not overlook the role of love in praxeology, it merely incorporates it into the system. Mueller should understand this.

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Mises on American Prosperity

(from p.37-39 of Ludwig von Mises, Profit and Loss)

“The tycoons are too powerful, too rich, and too big. They abuse their power for their own enrichment. They are irresponsible tyrants. Bigness of an enterprise is in itself an evil. There is no reason why some men should own millions while others are poor. The wealth of the few is the cause of the poverty of the masses.”

Each word of these passionate denunciations is false. The businessmen are not irresponsible tyrants. It is precisely the necessity of making profits and avoiding losses that gives to the consumers a firm hold over the entrepreneurs and forces them to comply with the wishes of the people. What makes a firm big is its success in best filling the demands of the buyers. If the bigger enterprise did not better serve the people than a smaller one, it would long since have been reduced to smallness. There is no harm in a businessman’s endeavors to enrich himself by increasing his profits. The businessman has in his capacity as a businessman only one task: to strive after the highest possible profit. Huge profits are the proof of good service rendered in supplying the consumers. Losses are the proof of blunders committed, of failure to perform satisfactorily the tasks incumbent upon an entrepreneur. The riches of successful entrepreneurs are not the cause of anybody’s poverty; it is the consequence of the fact that the consumers are better supplied than they would have been in the absence of the entrepreneur’s effort. The penury of millions in the backward countries is not caused by anybody’s opulence; it is the correlative of the fact that their country lacks entrepreneurs who have acquired riches. The standard of living of the common man is highest in those countries which have the greatest number of wealthy entrepreneurs. It is to the foremost material interest of everybody that control of the factors of production should be concentrated in the hands of those who know how to utilize them in the most efficient way.

It is the avowed objective of the policies of all present-day governments and political parties to prevent the emergence of new millionaires. If this policy had been adopted in the United States fifty years ago the growth of the industries producing new articles would have been stunted. Motorcars, refrigerators, radio sets, and a hundred other less spectacular but even more useful innovations would not have become standard equipment in most of the American family households.

The average wage earner thinks that nothing else is needed to keep the social apparatus of production running and to improve and to increase output than the comparatively simple routine work assigned to him. He does not realize that the mere toil and trouble of the routinist is not sufficient. Sedulousness and skill are spent in vain if they are not directed toward the most important goal by the entrepreneur’s foresight and are not aided by the capital accumulated by capitalists. The American worker is badly mistaken when he believes that his high standard of living is due to his own excellence. He is neither more industrious nor more skillful than the workers of Western Europe. He owes his superior income to the fact that his country clung to “rugged individualism” much longer than Europe. It was his luck that the United States turned to an anticapitalistic policy as much as forty or fifty years later than Germany. His wages are higher than those of the workers of the rest of the world because the capital equipment per head of the employee is highest in America and because the American entrepreneur was not so much restricted by crippling regimentation as his colleagues in other areas. The comparatively greater prosperity of the United States is an outcome of the fact that the New Deal did not come in 1900 or
1910, but only in 1933.

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Rothbard on inflation and interest rates; their connection

Rothbard’s “myth 4” out of the 10 myths he refuted here has to do with the relationship between inflation and interest rates:

Every time the Fed tightens the money supply, interest ratesrise (or fall); every time the Fed expands the money supply, interestrates rise (or fall).

The financial press now knows enough economics to watch weekly money supply figures like hawks; but they inevitably interpret these figures in a chaotic fashion. If the money supply rises, this is interpreted as lowering interest rates and inflationary; it is also interpreted, often inthe very same article, as raising interest rates. And vice versa. If the Fed tightens the growth of money, it is interpreted as both raising interest rates and lowering them. Sometimes it seems that all Fed actions, no matter how contradictory, must result in raising interest rates. Clearly something is very wrong here.

The problem is that, as in the case of price levels, there are several causal factors operating on interest rates and in different directions. If the Fed expands the money supply, it does so by generating more bank reserves and thereby expanding the supply of bank credit and bank deposits. The expansion of credit necessarily means an increased supply in the credit market and hence a lowering of the price of credit, or the rate of interest. On the other hand, if the Fed restricts the supply of credit and the growth of the money supply, this means that the supply in the credit market declines, and this should mean a rise in interest rates.

And this is precisely what happens in the first decade or two of chronicinflation. Fed expansion lowers interest rates; Fed tightening raises them. But after this period, the public and the market begin to catch on to what is happening. They begin to realize that inflation is chronic because of the systemic expansion of the money supply. When they realize this fact of life, they will also realize that inflation wipes out the creditor for the benefit of the debtor. Thus, if someone grants a loan at five percent for one year, andthere is seven percent inflation for that year, the creditor loses, not gains. He loses two percent, since he gets paid back in dollars that are now worth seven percent less in purchasing power. Correspondingly, the debtor gains by inflation. As creditors begin to catch on, they place an inflation premium on the interest rate, and debtors will be willing to pay it. Hence, in the long run anything which fuels the expectations of inflation will raise inflation premiums on interest rates; and anything which dampens those expectations will lower those premiums. Therefore, a Fed tightening will now tend to dampen inflationary expectations and lower interest rates; a Fed expansion will whip up those expectations again and raise them. There are two, opposite causal chains at work. And so Fed expansion or contraction can either raise or lower interest rates, depending on which causal chain is stronger.

Which will be stronger? There is no way to know for sure. In the early decades of inflation, there is no inflation premium; in the later decades,such as we are now in, there is. The relative strength and reaction times depend on the subjective expectations of the public, and these cannot be forecast with certainty. And this is one reason why economic forecasts can never be made with certainty.

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Guido Hulsmann on Religion and Liberty

A little glimpse of the personal perspective held by Jorg Guido Hulsmann on religion and liberty, as written in the forward to Ralph Raico’s book The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and Lord Acton.  It’s always neat to read little things like this from economists that have greatly impacted you.

Religion and liberty—few issues are more controversial among current-day libertarians. At least four positions can be distinguished. One well-known position holds that religion and liberty are separate spheres that are almost hermetically sealed from one another, while any historical point of contact is purely accidental or contingent. According to another wide-spread position, religion and liberty are outright antagonistic. These advocates see in religion the most deadly foe of individual liberty, an even greater enemy of mankind than the state. A third position contends that religion and liberty are complementary: on the one hand, pious men facilitate the workings of a society with minimal or no government and, on the other hand, political liberty facilitates religious life as each one sees fit. Finally, some thinkers defend a fourth position, namely, that religion—and in particular the Christian faith—is fundamental for individual liberty, both as far as the historical record is concerned and on the conceptual level.

In our thoroughly secularised culture, the third position is held to be daring and the fourth insolent. Yet today, I do believe that they are both true and that the third is a skin-deep statement of the truth, while the fourth goes to the root of the matter. Once a pagan interventionist, I first saw the truths of libertarian political theory, and eventually I started to realize that the light of these truths was but a reflection of the encompassing and eternal light that radiates from God through His Son and the Holy Spirit.

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