Thoughts on Stefan Molyneux and FDR

Originally posted on mises.org:

Molyneux is an excellent communicator of libertarian ideas; there can be little doubt about that, with great videos like this and this.  I check in at the FDR forums occasionally to see what's going on there.  It used to be more academic and focussed on philosophy and law and anarchy theories and so on, but discussion has shifted towards mainly threads on parenting, personal relationships, and people seeking advice about recovering from the effects of having had "abusive" (in the extremely broad sense used on FDR) parents.  There is a strong sense of community at FDR, especially since this shift took place.

Whether they are a cult depends on your definition of the word, but I do see Molyneux and the Freedomainers sharing many similarities to Rand and the Randians.  I think some of what Murray Rothbard said about the latter applies to them.  In addition to the Molyneux Revealed site, there is also FDR Liberated if you want to read more about the cult angle.

With regard to Ron Paul, I disagree with Molyneux.  Most of his criticisms of Paul fade away when you realise that Paul's primary goal is spreading the libertarian message, and being in office and running for President was for him purely a means or strategy for doing that effectively - for better or worse.  Molyneux is wrong to conflate Paul's strategy (i.e. Rothbard and Rockwell's strategy) with the flawed strategy of 'dismantling the state from the inside', which is what basically all so-called "libertarian" politicians that aren't Ron Paul are trying to do.  Whether Paul's strategy or Molyneux' strategy has been or is going to be more effective at spreading the message of liberty is an interesting debate to have, but Molyneux never really gets round to that debate, because he never addresses Paul's actual strategy, just a strawman version of it.

Walter Block made some negative and entirely unjustified remarks about Molyneux recently.  And David Gordon critiqued Molyneux' UPB, quite reasonably.  I expect these events left some Freedomainers with a dislike of mises.org (see threads here and here).  But I think it's extremely unlikely you were not allowed to join the FDR forum just because you mentioned mises.org.  The knowledgable posters there link to mises.org quite often.  Have you tried joining again or emailing for an explanation?

Ten Reasons Not To Abolish Slavery (by Robert Higgs)

Some of these may sound familiar...

An Open Letter to the Peace Movement (by Roderick Long)

A consistent peace activist must be an anarchist. If you love peace, work for anarchy.

Totalitarian Communism in Münster (by Murray Rothbard)

Death on the NHS: The Failure of Socialised Healthcare

Economics tells us that monopolised healthcare is a bad idea.  Here are some of the predictable results of monopolised healthcare in the UK.

2012

Patients starve and die of thirst on hospital wards (6 Oct 2012)

You must go blind in one eye before NHS will treat you (30 Jun 2012)

Sentenced to death for being old: The NHS denies life-saving treatment to the elderly, as one man's chilling story reveals (7 Apr 2012)

Top doctor's chilling claim: The NHS kills off 130,000 elderly patients every year (20 Jun 2012)

Elderly patients are being 'deprived of food and drink so they die quicker and free up bed space', claim doctors (9 Jul 2012)

Hundreds die from strokes at weekends because of poorer NHS care: study (9 Jul 2012)

Patients starve and die of thirst on hospital wards (6 Oct 2012)

Now sick babies go on death pathway: Doctor's haunting testimony reveals how children are put on end-of-life plan (29 Nov 2012)

2011

UK surgeons raise the alarm on waiting lists (5 Apr 2011)

NHS Director dies on due to waiting list at hospital she oversaw (31 Mar 2011)

NHS providing substandard care to seniors (14 Feb 2011)

Maternity care on verge of breakdown in UK (1 Jan 2011)

Man turned away from hospital 4 times, left to die (16 Mar 2011)
Nurse arrested over hospital sabotage murder (20 Jul 2011)
Surgeons raise alarm over waiting (5 Apr 2011)

Former NHS director dies after operation is cancelled four times at her own hospital (31 Mar 2011)

UK student died after wait for treatment outside of hospital (14 Feb 2011)

NHS budget squeeze to blame for longer waiting times, say doctors (19 May 2011)

Two patients died after waiting in ambulance outside 'full' Oldham hospital unit (21 May 2011)

Hospital Slammed After Mum And Newborn Die (16 Jun 2011)

NHS rations knee and hip replacement operations to save money (28 Jul 2011)

2010

Sick Americans live as long as health British (3 Nov 2010)

Lack of drug availability endangers preemies (1 Oct 2010)

Frail elderly patients 'left to starve in hospitals', admit more than two-thirds of NHS nurses (30 Aug 10)

NHS to make cuts to basic services (24 Jul 10) (24 Jul 2010)

Cash Crisis In UK leaves patients without beds (18 Jul 10) (18 Jul 2010)

Thousands denied routine cancer drug in UK (6 May 10) (6 May 2010) 

NHS blunder changed organ donors' wishes (11 Apr 10) (11 Apr 2010)

Delays increase due to funding crisis in UK (3/20/10) (20 Mar 2010)
A quarter of NHS hospitals fail to meet basic hygiene standards (3/19/10): (19 Mar 2010)
UK Woman denied lifesaving surgery for living two streets away (4/21/10) (21 Apr 2010)
8 year old boy dies in UK after being refused an ambulance (4/23/10) (23 Apr 2010)

2009 
British newspaper reports on serious persistent shortages (26 Aug 2009)
British newspaper reports on a study of substandard care throughout the UK (27 Aug 2009)
British report on denial of life-saving drugs (29 Apr 2009)
British children going to hospital instead of dentist due to shortages (12 Apr 2009)
Scotland has long delays in cancer treatment (21 Mar 2009)
Emergency care inadequate in UK (17 Mar 2009)
Children in UK wait up to two years for a wheelchair (4 Mar 2009)
Sentenced to death on the NHS (2 Sep 2009)
Woman gives birth on pavement 'after being refused ambulance' (17 Aug 2009)
'Cruel and neglectful' care of one million NHS patients exposed (27 Aug 2009)
The babies born in hospital corridors: Bed shortage forces 4,000 mothers to give birth in lifts, offices and hospital toilets (26 Aug 2009)
Over 45,000 NHS staff call in sick each day (19 Aug 2009)

2008 
Less than 10% of UK hospitals tested passed basic hygiene rules (24 Nov 2008)
A report on worldwide deficiencies in countries with socialized care (18 Mar 2008) 
Elderly Patients Being 'Written Off' in UK (7 Jul 2008)
NHS accused of 17,000 unnecessary deaths (18 Jan 2008)

From Scarcity to Money

An attempt to show in diagram form the progression from the observation that objects are scarce/rivalrous, to the necessity of property laws, to the development of money.

Transcript for Government Explained 2: The Special Piece of Paper

Alien: So tell me more about your ‘leaders’. Who is the current leader of your species and where are they leading you?

Human: We don’t have just one leader for the whole world. The world is divided into countries, and each country has a leader of its own, and a government of its own.

Alien: You don’t have one government that rules the whole planet?

Human: No, this planet is really big and there are billions of people on it. The world is divided up, because people in different places want different kinds of leaders and governments.

Alien: How many countries are there?

Human: A couple of hundred, I think.

Alien: So there are millions of people per country?

Human: Yes, or hundreds of millions, in some of them.

Alien: And all the people in a country live under one single government?

Human: There can be layers of government, but there’s only one government in each country. That is how it works.

Alien: But you can have multiple governments on the same planet?

Human: Yes and its better that way. If you had single government for the whole planet and it turned tyrannical, there’d be nowhere to escape to and no one to oppose it. And I wouldn’t want to be ruled by a bunch of people living thousands of miles away on the other side of the planet. It’s better having government more local, because then it’s more accountable.

Alien: How far is it from here to where the rulers of this country live?

Human: The capital of this country is hundreds of miles from here.

Alien: So you don’t want to be ruled by a bunch of people living thousands of miles away, but you don’t mind being ruled by a bunch of people living hundreds of miles away?

Human: That’s just how it is, I guess.

Alien: Why don’t you and your neighbours set up your own country here, so you can keep a close eye on what the individuals acting as your government are doing?

Human: I don’t think our government would allow us to do that.


Alien: So you have these countries, some big and some small, and the individuals living in each country separately choose which people are going to be their politicians and as act as government of that country?

Human: Yes, although not everyone is lucky enough to live in a country where we get to choose our leaders. A lot of countries have kings or dictators or warlords running their government. People in un-democratic countries don’t get to choose their leaders.

Alien: So you consider yourself lucky because you live under a democratic government, where you, along with millions of other people, get to vote, and whoever gets the highest number of votes becomes leader of the government, the gang that tells you what to do and robs you.

Human: Yes. But there’s more to it than that. Democracy isn’t the only thing that’s great about the government of this country. In fact, democracy itself is not an ideal system at all – everyone knows that. With a pure democracy, the majority rules, because the politicians do whatever the majority of people want them to do, and this can be a problem for minorities. We know this. The real reason why we’re lucky in this country is that our government is not a pure democracy, but a republic. With a republic, minority rights are protected against the tyranny of the majority.

Alien: How?

Human: Our rights are listed in our Constitution, the document that established our government. It lays out how government is supposed to work. It says what government is allowed to do, and what it isn’t allowed to do.

Alien: What does it say government is allowed to do?

Human: Government is allowed to collect taxes for things like national defense...

Alien: Hold on - the Constitution says that government is allowed to collect taxes? So it says that the individuals who are acting as government are allowed to rob everyone else using threats of violence?

Human: Yes, but only to do good things.

Alien: Where did the Constitution come from?

Human: It was written by the Founders of this country, the people who first set up the government.

Alien: The first politicians of the country?

Human: Yes.

Alien: So a bunch of regular people just got together and wrote on a piece of paper that they’re allowed to rob everyone else, as long as they call themselves “government” and call their robbery “taxation”. Then because they have this special piece of paper, everyone just sits back and lets these guys rob them?


Human: You’re missing the point. The Founders wrote the Constitution to restrain government. They made sure there was a separation of powers, so there were checks and balances in the system. They did this to strictly limit the power, size and scope of government. They made a list of things the government can do and must do, and everything else the government can’t do. They even wrote about specific things that the government can’t do, like violating the inalienable rights of the people to life, liberty and the pursuit of happiness.

Alien: OK. But I don’t see why the piece of paper is so important. I mean, hypothetically, what if the majority of the people want government to do something that the Constitution says government shouldn’t do? Couldn’t the people vote in politicians who promise to do it for them, regardless of what the Constitution says? How does having your rights listed on an old document help protect your rights today?

Human: Well if the politicians who get voted in want to pass unconstitutional legislation, then the third branch of government, the judicial, will step in and not let the legislation pass. The Founders recognised the problem of democracy, so they gave us a Supreme Court, and their role is check whether legislation is constitutional or not.

Alien: But the Supreme Court is itself part of the government?

Human: Yes. Politicians get voted into positions in the Executive and Legislative branches, but the Judicial branch is made up of judges. So if a majority supports the government violating the rights of a minority, the judges of the Supreme Court simply won’t let it happen.


Alien: Are these Supreme Court judges just regular humans?

Human: Yes.

Alien: So how does a regular human become a Supreme Court judge?

Human: They are appointed.

Alien: By who?

Human: The politicians.

Alien: But then what is to stop the democratically-elected politicians just appointing judges who will allow their popular but unconstitutional legislation to pass?

Human: Well, they just aren’t allowed to do that.

Alien: By who?

Human: By the constitution.

Alien: The piece of paper?

Human: Yes. I admit it’s not a perfect system. I suppose what you’re saying could happen.

Alien: Does the government of this country, which you consider yourself lucky to live under, ever do things its own Constitution explicitly forbids?

Human: Yeah, a lot of things actually. The government is a lot bigger now than it was when the Constitution was written. The politicians pay lip service to the Constitution, but they trample over our rights anyway.

Alien: What about the Supreme Court?!

Human: I guess that system hasn’t worked very well lately. Government does pass unconstitutional laws all the time. The separation of powers worked for a while though, it’s not a bad system!

Alien: Powers were separate? I thought you said that the powers were all in branches of the same government?

Human: Well yes. The branches of government are totally independent and separate from each other, except that they are all part of the same organisation and all funded by taxation. Alien: So when you said the system had checks and balances in it, you meant that the government would check itself, and balance itself?

Human: That was the idea.


Alien: So, let me get this straight, a long time ago a small bunch of regular humans had a meeting and created a document called a Constitution that said that they can rob everyone else – millions of people – using threats of violence to make everyone obey their rules and commands. But so that the masses of the people would let them get away with this robbery and slavery, that small bunch also promised in the same document that there were some things the government would never do, and they described a way to structure government so as to restrain it. But, over time, the promises have proven to be worthless, the restraints have proven to be useless, and government has grown significantly in size, power and scope, violating more and more of the rights of the people. It sounds to me that if the Constitution was written to constrain government, then it has been a complete failure.

Human: Well, the real problem is that people just don’t believe in the Constitution any more. The Constitution only works when people know what it says and why it’s important. If people just knew that, then they wouldn’t vote for politicians who violate it. An informed populace: that’s the only way to really restrain government.

Alien: Wait, you said you feel lucky because this country is a republic not a democracy, and a republic has these supposed “checks and balances” that prevent government from violating people’s rights, even when a majority wants to violate the rights of others. But now you’re telling me a republic can only work if people refrain from electing politicians who will violate the rights of others in the first place. That’s the same as a democracy. We’re back to where we started.

Human: I see your point.

Alien: Is there anywhere on the planet where government is, despite the imaginative labels, anything other than a gang of thieves and bullies?

Human: But there’d be chaos without government!

Alien: I’m sure that’s what they tell you…

Government Explained 2: The Special Piece of Paper

Continuing from where the original video ended, the human now tries to explain to the alien the concept of "countries", the difference between a democracy and a republic, and the purpose of a Constitution.

Message to the Voting Cattle (Larken Rose video)

The Complete and Undeniable Truth - Larken Rose

"Message to the Voting Cattle".  Simply incredible...

Critique of Patri Friedman on Folk Activism

Patri Friedman, founder and chairman of the Seasteading Institute, has an article at Cato Unbound called Beyond Folk Activism, in which he criticises the advocacy approach taken by many libertarians, which he refers to as “folk activism”.

Libertarians tend to spend a lot of time debating with non-libertarians, and amongst themselves, in an attempt to promote liberty to the masses, and bring about a large-scale change in public opinion, one person at a time. Friedman says this tendency to debate stems from “an instinct to seek political change through personal interaction, born in our hunter-gatherer days when all politics was personal.”

He continues:

“In the modern world, however, bad policies are the result of human action, not human design. To change them we must understand how they emerge from human interaction, and then alter the web of incentives that drives behavior. Attempts to directly influence people or ideas without changing incentives, such as the U.S. Libertarian Party, the Ron Paul campaign, and academic research, are thus useless for achieving real-world liberty.” 

This seems to overlook completely the insights of Mises and many other thinkers who have pointed out that the opinions of the masses are the ultimate determinant of what kinds of institutions exist and how they operate. Mises wrote:

“The masses, the hosts of common men, do not conceive any ideas, sound or unsound. They only choose between the ideologies developed by the intellectual leaders of mankind. But their choice is final and determines the course of events. If they prefer bad doctrines, nothing can prevent disaster.” 

“The supremacy of public opinion determines not only the singular role that economics occupies in the complex of thought and knowledge. It determines the whole process of human history.” 

Murray Rothbard was also very clear on this:

“The world, at least in the long run, is governed by ideas.” 

And so is Ron Paul:

“Fighting for liberty with ideas makes much more sense to me than fighting with guns or politics or political power. With ideas, we make real change that lasts.” 

Etienne de la Boetie understood the implications of this when he wrote:

“Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.” 

The idea that societal institutions reflect the attitudes, opinions and values of the people at large seems irrefutable. Consider first a society where everybody believed in the necessity and benevolence of government. Then there would be government. Now consider a second society where everybody identifies the notion of government as a scam and considers anyone who proposes setting one up as immoral. In this society, no government could exist. 50 years ago, pretty much everyone did believe government was necessary and benevolent. Since that time however, and particularly in the last decade, there has been a seismic shift and now a sizeable minority of the population are anti-statist, or very close to it. If the trend continues, eventually anti-statism will be the majority view, bringing us closer to a situation where we know no government could exist.

So this raises the obvious question: when will we start to see visible changes that reflect this change in public opinion? De la Boetie is certainly poetic, but what does he mean the Colossus will "fall of his own weight"? What will that look like? What events will take place to make that happen?

This is a widely debated question. One idea is that when a sufficient number of people are anti-state, they will elect representatives who will put an end to state activities “from the inside”. This strategy is the one taken by organisations like Cato and Reason, and recently the Libertarian Party. It is a widely rejected strategy, and in his article Friedman points out some of the problems with it: he describes it as libertarians “bashing their heads against the incentives of democracy”.

Secession and nullification is another strategy, and one that is far more likely to be successful. Hans Hoppe outlines the strategy in theory in this lecture. The Free State Project and The Seasteading Institute are both attempts at putting this theory into practice. While these projects are very important for bringing about liberty, it must not be forgotten that these projects are only possible after sufficient numbers of the masses are in favor of liberty. It seems that Friedman forgets this when he writes that:

“This plan [Seasteading] is one of immediate action, not hope or debate. It makes use of the people we have now rather than trying to convert the masses” 

He goes on to say:

“Seasteading is far from certain to succeed, but this is a hard problem, and there will be no easy answer. Two of the greatest risks are the expense and danger of the marine environment, and the chance that states will interfere. The latter is a systemic risk for any reform (if they'll interfere with a new city in the ocean, then no place is safe[7]), but the former is an idiosyncratic risk that could be diversified away if seasteading was part of a portfolio of freedom projects.” 

The risk that states will interfere is the key risk and it is worth spending some time thinking about how this risk can be mitigated. What will determine whether or not the state will interfere and how might they interfere? If a Seastead or a town in New Hampshire declares independence, the state has a very strong incentive to ignore the declaration, and send in an army of police, regulators and tax collectors, if they have to. It is not just the immediate lost tax revenue, but the risk of further secessions, until the state becomes obsolete, that will make the state extremely keen to prevent any secession.

Will they be able to send an army of police to prevent secession? That depends on how the situation will be perceived by the masses. If it is obvious to the masses that the secessionists are peaceful people who want to try out living in an independent state, then they may have no objection to the secession, and may be strongly opposed to the state moving in on them. The public may simply wish the secessionists good luck. If, on the other hand, the state can convince the public that the secessionists are "bad guys" in some way, they will be far more likely to accept the government moving in to put an end to the secession.

The state will do everything it can to turn public opinion against the secessionists. They will call them terrorists. They will say the seceding region will be a drugs haven and tax haven. They will call the secessions free riders, exploitative and unpatriotic. The state will do whatever it takes.

Will the state be able to convince the public that the secessionists are "bad guys", so they can go Waco on them? This is the big unknown, but the chances of this are surely directly related to the extent the masses favor liberty and the concept of secession. The charge of “tax evaders!” will fall on deaf ears if taxation is considered illegitimate. The charge that the seceded region will be a drug haven will fall on deaf ears if people are opposed to anti-drug laws in their own nation. If the public recognise secession as legitimate, it will be very difficult for the state to act against the secessionists.

Friedman presents Seasteading as though it is a path to liberty that sidesteps the difficult task of “converting the masses”. But, on the contrary, the success of the Seasteading project depends on how the masses feel about secession. This is why “folk activism”, aka promoting liberty and the idea of secession to open-minded people through debates and discussion, is not “useless for achieving real-world liberty”.

I applaud the efforts of everyone involved on a practical level with the Free State Project and the Seasteading Institute, but I reject Patri Friedman’s claim that trying to change minds is a useless endeavour.   Public opinion determines the whole process of human history.

To use de la Boetie’s analogy, when a town, country or Seastead comes to secede, it will be like starting to pull the pedestal out from under the Colossus. Certainly somebody needs to do this if the Colossus is to come down. But whether the pedestal can be removed, and whether the Colossus falls and breaks into pieces after this happens, or is able to remain standing strong and repair itself, depends on the reaction of the masses. We need people working on removing the pedestal, but we also need people working to make sure that when the pedestal starts to move, it will be moved easily, and that the collapse will then ensue, in the form of a torrent or snowball of secessions, until the state is obsolete.

Fat Head

http://vimeo.com/27652100

I just watched this documentary.  I was already familiar the thesis (fats are good, carbs are bad, basically), having read Taubes and Kendrick, but I was pleasantly surprised by how libertarian the documentary was.  These kinds of documentaries tend to have a leftist "it's all the greedy corportaions fault, we need more government" feel to them.  But this one didn't have that at all.  It placed the blame entirely on the government where it belongs.

What will future generations think of us?

Here in the 21st century, we look back at people in past centuries with a sense of amazement that they actually believed the things they said, and apparently saw nothing wrong with doing the things they did. Most people in past centuries were, by today’s standards, incredibly violent, vindictive, racist, sexist, homophobic bigots. We are rightly appalled that slavery - ownership of one man by another - was not only tolerated and accepted, but supported and rationalized, by almost everyone in society – even the slaves themselves. We are appalled that brutal forms of punishment, like hanging, beheading, burning at the stake, torture, having limbs cut off and eyes gouged out etc, were once the norm, even for the most trivial of crimes or sometimes for no crime at all. We are appalled that even in the 20th century, racism and sexism were the norm, and nobody seemed to have much of a problem with it.

We believe we are now more enlightened. But what will future generations think of our values, attitudes and morals? Is there anything we consider normal (not immoral) today, that future generations will be appalled and ashamed of? Do we have any blind spots? I think we do.

A lot of people today make arguments in favor of government actions. Take the statement “I think the government should enforce a minimum wage law.” This statement doesn’t seem so bad – it is economically ignorant, to be sure, because it hurts the very people it is supposed to help – but is it immoral? It doesn’t seem immoral in the same way that a statement such as “I think black people should be slaves of white people” is immoral.

But are they really that different? Both statements are supporting the use of violence by one class of people against another. Supporting a minimum wage law means supporting the use of violence by one class of people – who call themselves ‘the government’ – against another class: employers and employees, who are trying to make a voluntary exchange with each other for mutual benefit. In both cases, the violence is aggression: whites initiate violence against blacks when they enslave them; the government initiates violence against employers and employees when it threatens them with fines or imprisonment them for breaking the minimum wage law. How could it possibly be that one initiation of violence is moral while the other is immoral?

Most people today support a great many different kinds of government action, ranging from having government merely operating courts, police and defense services, to controlling schools, healthcare, money and banking, and regulating markets, through to all-out socialism, where government controls everything. I believe people in the future will look back at us today with bafflement, confusion and shame, for the way most of us not merely tolerate, but actively and passionately support this institution called government. Future generations will ask of us: what were they thinking?

Could they not see the contradiction inherent in having an institution set up to protect rights and liberty, which must necessarily violate rights and trample on liberty in order to exist?

Could they not see anything immoral with having one small group of people acting “above the law” and controlling the lives of everyone else, using threats of violence?  Why did they think that taxation was anything but mass robbery?  Why did they think war was anything but mass murder?  Why did they think mass robbery and mass murder were OK as long as they were done by someone acting as government?

Why did they keep turning to government to help solve the problems that the government itself had created? Was it not obvious to them that the cause of all the war, poverty and suffering they complained about was the very same government they supported so zealously?

Why did they think more violence was a good solution to social problems? Why did they keep demanding more laws, regulations, central planning and control? Why did they keep giving up their rights for empty promises of security and prosperity?

How did they ever expect to be able to find some selfless angel to run the country? Why did they think that someone needed to run the country in the first place? How arrogant/ignorant/utopian were they to think that, even if they found such an angel, he would be able to run the country better than the country runs itself?

Could they really not imagine a world without government?

The Sham Republican National Convention 2012

The Ron Paul campaign has been the target of attacks from the establishment from day one.  Media blackout, misrepesentation, personal attacks, changing rules to suit themselves, using strongarm tactics at conventions... these are all methods used by the establishment to prevent Paul's ideas from being heard.

At the National Convention this week, these attacks continued, as documented here:



Here is a report on the events at the Convention: Romney Nominated, Paul Delegates Walk Out

In the end, 190 delegates voted for Paul in the roll call - just under 10%, but a vast improvement on 2008, when Paul got just 15 delegate votes.  See the Mises Wiki page where I have been tracking the results, for a breakdown by state and some analysis.

The question many people are asking now is: why did Paul fail to win the nomination?  A better question in my opinion is: how is it that Paul was able to do as well as he did?

His campaigns in 2008 and 2012 have watered the withered tree of liberty like nothing before it - the Liberty Movement is stronger than ever.

Thank you, Dr Paul, and enjoy your well-earned retirement from politics.

We'll take it from here.

2nd Post to Ben McLeish

This is part of an ongoing discussion between me and Ben McLeish of the Zeitgeist Movement.  It started with my critique here of Ben’s video here.  Ben responded to the first half of my critique here.  This post is a response to that piece.

I want to start by thanking Ben for his efforts to understand libertarianism and Austrian Economics.  I hope that this post will help further his understanding of both.  I thank him also for recommending some texts to me so that I can better understand his position.  I look forward to his response to the second half of my critique, where he has promised to describe his vision of a “resource-based economy” in more detail.

This post is going to begin with some definitions, followed by a general discussion of Austrian economics.  After that, I will deal with the subjects in Ben’s post directly and in order.

Definitions

Ben asks me to provide my definitions of ‘voluntary’ and ‘free market’.  I have previously defined both these terms – and many others – in these three short blog posts: 1) The Task of Political Philosophers, 2) Libertarian Property Assignment Rules, and 3) The Task of Economists.  I ask Ben to read them first to get a better idea of my ‘framework’ for analysing society.  However, I will provide my definitions again here for completeness.

The most fundamental distinction between types of human interactions is the distinction between voluntary exchanges and coercive exchanges.  All (interpersonal) exchanges are one of these two types.  A voluntary exchange is an exchange where both parties consent to making the exchange.  A coercive exchange is an exchange where only one party consents.  Coercive exchanges only take place because the coercer uses or threatens to use violence to make the exchange take place (since otherwise the non-consenting party would just walk away).

I am sure Ben already recognises to some extent the significance of this distinction between coercive and voluntary exchanges.  For example, I presume Ben would consider it wrong for one individual to randomly punch another individual in the face – in most circumstances.  However there are circumstances where this is acceptable – for example, when boxing.  It is not wrong for one boxer to punch another boxer in the face while they are in the boxing ring.  What is the difference?  Consent.  By entering the ring, both boxers consent to be punched in the face, and neither one of them therefore has grounds to complain (of assault) when he is punched in the face.  In most circumstances, people do not consent to being punched in the face, and this is what makes it assault and wrong.

There are many other examples.  If I enter Ben’s house, it could be by invitation (voluntary) or it could be trespass (coercive), depending on whether I have Ben’s consent to enter his house.  This is a very important distinction.  The difference between normal sex and rape is consent.  The difference between charity and theft is consent.  The difference between employment and slavery is consent.  The former are all voluntary interactions; the latter are all coercive.

Fortunately, in our daily lives, almost all interactions between individuals are voluntary.  Some coercive actions – exchanges which involve the use or threat of violence (because otherwise the non-consenting party would simply walk away) – are committed by small-time criminals, but the vast majority of coercive exchanges today involve the State as the coercer.  All forms of taxation are coercive, for example, because taxes are, by definition, only paid because of the State’s threats of violence (imprisonment) against anyone trying to avoid paying taxes.  State regulations, price controls, tariffs, etc, are all coercive as well, since they too are based on the State using threats of violence against anyone who does not obey the commands of the State.

I hope this clarifies the crucial distinction between voluntary and coercive exchanges.  For more details, refer to my aforementioned blog posts.

The definition of a free market is now straightforward and easy to understand.  A market is defined as a pattern of interpersonal exchanges, and a free market is defined as a pattern of purely voluntary interpersonal exchanges.  To the extent that a market involves coercive exchanges, it is not a free market.  It may be referred to as a hampered market.  

Of course, it would be utopian to expect that a completely free market could ever be achieved.  Presumably there will always be people willing to commit coercion – murder, rape, assault, etc – and to that extent the market will never be completely free.  But as mentioned above, the biggest coercer in society today is the State; they are the largest of the criminal gangs (thanks mainly to their enormously successful PR).  My goal is a stateless society, at least, because all States are necessarily coercive so are incompatible with the free market.

Preamble

So far, several topics have come up and we are in disagreement, I believe, not because of anything trivial that can be resolved by tackling each issue one-at-a-time, but because we have fundamentally different ways of understanding the world.  If this conversation is to be fruitful, I believe we must get to the heart of our differences, search for common ground, and build from there. 

 

From my point of view, Ben does not understand my arguments primarily because he is not yet familiar with (Austrian) economics.  Without this understanding, it is impossible to understand how free markets really work and why hampered markets do not work, when it comes to resource utilisation.

For examples 1) in response to Ben’s points about planned obsolescence, I referred to the idea of consumer sovereignty, but Ben is not convinced such a thing even exists – and without being familiar with (Austrian) economics, it is easy to see why he would doubt it.  2) In response to his points about technological unemployment, I referred to how the free market responds to technological advancement, but Ben does not yet understand how the market process, i.e. the process which happens in a free market economy in response to changing conditions, works in general.  3) Finally, I defended the charging of interest partly on the basis of its importance as a signal to entrepreneurs that guides efficient use of resources, but without an understanding of economic calculation, this defense will not be understood.  Without a solid understanding of how free markets work, my explanations of these things will continue to be misunderstood by Ben.

Ben has shown a good willingness to learn these things.  If Ben is to read one whole book to get a better understanding of markets, I hope that it is Economics in One Lesson by Henry Hazlitt.  There are several chapters in that short book that directly address some of Ben’s arguments.  I am thinking specifically of the chapters “The Curse of Machinery”, “Spread-the-Work Schemes” and “The Fetish of Full Employment”.  But the whole book will help enormously with understanding how free markets work, and recognising common mistakes made by opponents of free markets and wannabe central planners.  It is not ‘rigorous’ but serves as a good introduction to ‘thinking like an economist’.

Austrian Economics

I want to elaborate on a point I made in my original critique, because it is crucial to understand.

“Empirical evidence itself is of no use for understanding the effects of different norms relating to how resources are used – for that we need economics, and economics is a strictly axiomatic-deductive, i.e. non-empirical, science, as explained by Austrian economists such as Ludwig von Mises, Murray Rothbard and Hans Hoppe.”

Ben characterises this paragraph as an ‘admission’.  But this is the unique method of Austrian economics: it is what sets it apart from other schools of economics.  This is the ultimate reason why Austrians reject Keynes, Friedman, and Marx etc: they have a flawed methodology, unsuitable for the science of economics. 

It may sound crazy to say that economics can be non-empirical.  Isn’t it a bit convenient (and unscientific!) that we Austrians can ‘ignore’ empirical evidence that appears to contradict our theories?  Our answer is a resounding no, and in fact it is the empiricists who are being unscientific!  This is a deep subject of course, and I could get carried away writing about it, so for the sake of brevity, I will refer you to Hans Hoppe for a full explanation.  His short book Economic Science and the Austrian Method is excellent, or you could watch his lecture Praxeology: The Austrian Method.  Alternatively there is David Gordon’s Introduction to Economic Reasoning.

I will just point out that it is of crucial importance to use the correct methodology in any subject.  The laws of chemistry and biology can only be learned using the scientific method, because they are empirical subjects.  We make observations, construct hypotheses, make predictions, perform experiments, and take measurements etc, to discover biological or chemical laws. 

The laws of mathematics, on the other hand, can only be learned through logical deduction, because mathematics is a non-empirical (a priori) subject.  Some ‘empirical mathematician’ who claimed to have found in nature a triangle that violated Pythagoras’ Theorem would be laughed at by mathematicians, and rightly so.  Obviously, he would be incorrect (perhaps his measuring instruments are faulty?) because Pythagoras has been mathematically (logically) proven to be true – which is to say, the theorem is true whenever the fundamental axioms of geometry are true.  Likewise, someone who claimed Pythagoras Theorem is true because he has drawn and measured 10,000 triangles and they all obey the theorem would also be laughed at.  He may be right in his conclusion, but he’s not using the right methodology to reach it and so his work is useless to mathematics.  He’s not a proper mathematician; he’s a crank.

Austrians (uniquely) put economics in the same category as mathematics in this sense.  Economics is axiomatic-deductive.  Take the statement “all other things being equal, the introduction of a minimum wage law will increase unemployment”.  Austrians maintain that this true because it has been derived using deduction from a true axiom.  A non-Austrian would say this is either a) true because the empirical data shows that minimum wage laws do usually increase unemployment, or b) false because the empirical data shows that minimum wage laws do NOT usually increase unemployment. 

While non-Austrians argue endlessly over the empirical data and its interpretation and meaning, Austrians sit back, knowing that the empirical evidence has no bearing on the truth or falsity of the statement.

So what if empirical evidence shows that, in some time and place, unemployment decreased when a minimum wage was introduced?  The Austrian response is that the clause “all other things being equal” obviously did not hold.  Some other factor – of the millions of factors that influence such variables as the unemployment rate in the real world – must have changed, and had a greater effect than the introduction of the minimum wage.  A non-Austrian pointing to a supposed ‘counterexample’ would be dismissed by Austrians the same way a proper mathematician would dismiss an ‘empirical mathematician’ who went around measuring triangles and trying to use the ‘scientific method’ to prove mathematical laws.

 
This is not to be taken to mean that Austrians ‘reject’ empirical data.  We merely understand the limits of empirical data, and use it only where it is appropriate to do so.  Empirical data is useful for economic history, and for economic forecasting, but not for economics itself.  Austrian economics cannot be refuted by empirical data; it can only be refuted by pointing to flaws in the axiom or in the deductive process used to reach conclusions.

Bearing in mind all my above points, I will now respond to Ben’s post directly and in order.

Money

In my original critique, I asked Ben to provide a few definitions, starting with ‘money’ and ‘monetary system’ (and ‘monetary-market system’).  In his post, he defined the former, but not the latter.  I could assume that he defines ‘monetary system’ as a society of individuals who use money, but I would appreciate an explicit definition to avoid any misunderstanding.  There may be a difference between ‘monetary system’ and ‘monetary-market system’ as well that I am missing.

Ben defines money in this paragraph: “Money is, and has been throughout its relatively short history in the human story, a societal tool to facilitate the differential exchange value of property or human/machine labour (or property whose own value has been enhanced or modified by human or mechanical labour.)”

Definitions can never be true or false, of course; definitions are to be judged on their usefulness for communicating ideas.  I suggest to Ben that this is a poor definition.  First, by saying ‘and has been throughout its relatively short history’ Ben is making his definition context-dependent.  He is implying that money could be something other than what he is about to define it as.  This is not useful, because it is then not a general definition of money.  Second, the definition contains many terms that themselves need defining.  What is a ‘societal tool’?  How is it different from just ‘a tool’?  What is ‘value’?  What is ‘exchange value’?  What other types of value are there?  How is he defining ‘property’?  This definition of money does not help me understand what he has in mind, because I do not understand what he has in mind by these terms.  Simpler definitions are generally better than complicated definitions, and Ben’s definition of money here is unduly complicated.

As a comparison, my definition of money is simply: a general medium of exchange.  I explain what an exchange is, what a medium of exchange is, and what a general medium of exchange is, in my post The Task of Economics. 

Ben’s next two paragraphs make it appear, however, as though his definition is actually equivalent to mine, or very close.  He says: “What has been used as money? In addition to the fractional and fiat currency … much else has been used in the past as a medium of exchange. The most famous objects used are the “precious metals” of gold and silver, but also marijuana, chocolate, stones, ornamental belts in China and many others have been used at various times.”  It seems here that Ben is using ‘money’ and ‘medium of exchange’ as equivalent.   I could accept this definition, although I think it is more useful to add the requirement that money is a general medium of exchange, as opposed to any medium of exchange.

Since conversations don’t go anywhere until key terms are defined and agreed upon, I ask Ben to either accept my definition, explain how his complicated definition is different to mine, or make an argument for why it is more useful to define money as any medium of exchange, as he seems to do above.

Money Decoupled From Resources Today?  Yes!

Ben: “This overall description of money is a simplistic characterisation, however, and itself requires an additional explanation of how money has been framed in the philosophy of private property. Indeed, it is this framing that has ultimately given rise to two major issues with the monetary system. 1) Money has itself become a form of private property itself, and 2) it has become entirely decoupled from any real-world referent whatsoever, resulting in the overall separation of the operation of ANY definition of a market economy from its real world resource allocations”

I am unsure what to make of Ben’s point 1, because I don’t know how he is using the term ‘private property’.  I ask Ben to define that term.  I also don’t know what he means by “how money has been framed”.  He says this “framing” has given rise to the “issue” that money has “become a form of private property itself”.  I don’t know what this means.  What was it before that happened?  How did “framing” cause that to happen? 

His second “issue” is that money “has become entirely decoupled from any real-world referent”.  This I can agree with, within the current monetary regime.  Because of the government monopoly on money, there IS a large disconnect between the monetary ‘signals’ today and real underlying resources. 

It cannot at all be said, for example, that a millionaire today must have used resources efficiently in the past.  The majority of millionaires (and billionaires, especially) have made their money using coercion, either directly or indirectly.  For example the CEO of a bank or a big corporation today has got rich because his organisation has special privileges from the government, not because his organisation has used resources wisely for satisfying consumers.  The government uses coercion on behalf of these corporations and the result is that those corporations become much bigger than they would be without the privileges, and the CEOs get much richer. 

Today, money is very much decoupled from any real world referent.  However, in a free market, this is not the case.  In a free market, money – the general medium of exchange – is very closely related to resource usage.  For example, if you have a free market, a producer can add the money prices of his inputs and subtract them from the money price of his output, and if he is left with a positive number (a profit) then it can be said that he has used resources wisely.  He did the right thing (from the point of view of society as a whole) by engaging in that production process because he has transformed objects of lower value (reflected in lower prices) into objects of higher value (reflected in a higher price). 

The general problem with widespread use of coercion (i.e. a State) is precisely that it decouples money prices from real world values.  This is why with a hampered market, when a producer makes a profit, we cannot say at all that he has used resources wisely.  In other words, what State coercion hampers is economic calculation.  See Mises on economic calculation.

John Locke

Ben brings up Locke.  I am not sure why.  Locke is often credited with originating the important libertarian principle of homesteading, but the modern concept of homesteading is quite different to how Locke described it.  For this reason, I won’t comment on that part of Ben’s post.

Value

Ben: “Graham has a problem with my defining money as being bestowed value by its scarcity (of the money supply, in this case) and its perceived shared value. He claims that since “value is subjective” this could be true of anything. Indeed – this is why many different items have been used as money in the past (even fairly spoilable ones.) Yet I am unsure how this argument is going to help him defend a monetary system.”

I apologise, Ben, because I must not have been very clear in that part of my post.  First, as you agreed at the top of your post, you didn’t even define money in your talk, so I cannot have had “a problem” with your definition.  Second, I did not comment on your claim that money gets its value from scarcity, except to ask you to provide a definition of the term, which you have still not done.  You will find my definition of scarcity in my post The Task of Political Philosophers.

Value is indeed subjective.  Do you agree?  What it means for value to be subjective is that objects do not have any kind of “inherent” or “objective” value.  If nobody in the world values object X, then object X has no value.  If one person values object X and another person does not value object X, then object X has value to the first person but has no value to the second person.  If object X is valued by everybody, then object X has value to everybody.  It really is that simple.  Value only makes sense in reference to a human actor doing the valuing.

So where does the value of money come from?  It comes from people valuing money.  So then why do people value money?  As I pointed out, it’s because they can exchange it for goods that they value in direct use.  It cannot be denied that money has value, because it is a plain fact that people value it, and this is what it means to say that an object “has value”.

I did not say in my post that today’s un-backed, fiat, paper money has no value.  I said that it has no value for direct use, which is true by definition.  It has value to individuals only for use in exchange.  A commodity money is, on the other hand, valued by individuals for direct use as well as for use in exchange.
 

I hope this resolves the problems you have with what I said about value and money. 

Ben: “And before we hear claims that this would not be the case with commodity money; what use is gold? Why is it valuable? Indeed it shines, and is malleable. But what uses does it have?”

To clarify, I am not in favor of commodity money as such.  I am in favor of free markets, which means I believe people should be free to use whatever they want as a medium of exchange – commodity or non-commodity.  The reason Austrians are often characterised as being in favor of commodity money is that we expect (predict) that a free market will result in a money developing (i.e. a general medium of exchange), and specifically a commodity money – not mere paper.  Further, Austrians tend to expect gold to be the particular commodity that takes the role of money in a free market.  It would take too long to explain here exactly why we expect these results, but the general idea is that media of exchange are useful, one medium will tend to become commonly accepted – a money – due to network effects, and gold has good “moneyish” qualities (divisibility, portability, density, easy to recognise, hard to inflate, hard to counterfeit, etc).

ABCT and Keynes

I was delighted to read the following:

Ben: “Graham points out the boom-bust cycle as a product of fractional reserve banking. He is entirely correct. I would add to this, that during busts, especially modern busts, like that of 1929 or 2008, MASSIVE redistribution of wealth aggregates to the top money-possessors.”

Since I didn’t mention it by name before, the idea that fractional reserve banking is the cause of the boom-bust cycle is called Austrian Business Cycle Theory (ABCT).  It is the only cycle theory in economics that is able to explain the busts of both 1929 and 2008 (and all other booms and busts in history).

I was disappointed when later I read:

Ben: “I am no explicit fan of [Keynes], by the way, and my arguments below actually do not rely on him – he just said it first – , but he didn’t exactly fail at The New Deal to clear up the mess of the prior “free market”, did he?”

The New Deal was a massive expansion of government, and it was a complete failure.  It made the recession following the bust of 1929 far worse than it otherwise would have been, and the recession deepened into a depression and dragged on because of the New Deal, and only ended when the troops returned home from WW2. 

The period before 1929 was not even close to a free market.  The Fed – the money monopolist (which makes massive fractional reserve banking possible) – had been established in 1913.  The Fed inflated the money supply massively (enabling the US to enter WW1), causing a malinvestment boom which resulted in the bust of 1920.  The government took a relatively hands-off approach to dealing with the recession of 1920, and as a result, the recession ended within 18 months.  From 1921-1929, the Fed inflated the money supply massively again, and just as ABCT predicts (and Mises and Hayek predicted at the time), a malinvestment boom and subsequent massive bust occurred. 

The blame for the bust of 1929 lies squarely with the Fed (a government institution), and Keynes’ New Deal expansion of government turned a short recession into a long depression.  Bob Murphy and Tom Woods are excellent on this subject.  Or there’s always Rothbard.

Ben may not be an “explicit fan” of Keynes, but his arguments (especially about technological unemployment) are very much Keynesian.  I mentioned Keynes’ support for the crazy money-in-bottles idea to make the point that his economic framework leads directly to such absurd conclusions, so that Ben might consider abandoning his Keynesian framework entirely and adopting the Austrian approach.

The Rich

Ben makes a great point here:

“Any millionaire, or rich group of individuals, will want to maintain their status as the richest in a society. Otherwise what’s the point of striving to be rich? This means that new disruptive innovations such as mass cheap transit will be fought by the existing and incumbent transport owners, no matter if they have a “state monopoly” or whether it’s a private cartel (or a lone super-moneyed oligarch.)”

This is correct: rich people generally hate free markets, and it’s not hard to see why.  When someone is rich, they prefer to have the government step in and use coercion against their competitors, so they can stay rich without having to continually satisfy consumers as they would have to do in a free market.  This is why big banks lobby for more banking regulations, big drug companies lobby for more drug regulations, big energy companies lobby for more energy regulations, and so on.  This is why so many major industries are dominated by a few small firms – they’re the ones who secured protection from government – they are a cartel.  Governments are only too happy to create these regulations at the behest of big business lobbyists – government and big business are a partnership in swindling the public.

What’s the solution?  Oppose the regulations.  Government regulations make the playing field unfair, by favouring big businesses and stifling new and smaller businesses, to the detriment of society as a whole.  The bank bailouts are probably the most obvious example of government doing favors to big business, but ALL regulations have the same effect of cartelizing industries, rendering them less responsive to consumers and able to charge high prices for poor quality goods and services.

Without government regulations, cartelization is nearly impossible.  No private cartel (of companies not satisfying consumers) can be maintained, due to internal and external pressures making it inevitable that the cartel will break up, without the government to hold it together.  For more on this, see Chapter 10.2 of Man, Economy and State by Murray Rothbard.

Borrowing

 
Ben: “What’s voluntary about having to borrow and become indebted? This is not a rhetorical question, I literally don’t understand nor can follow the logic (our disposition in this movement is that we should celebrate being wrong, for we “become right” in the process. Here I stand ready to be educated by “Mr Wright” – pun intended.)”

From my definitions of the top of this post, I hope you now understand the sense in which I’m saying a loan agreement is voluntary.  Both parties consent to it.  It is not one stealing from the other.  Either party could just walk away.  There is no threat of violence being used to make the exchange take place.

Savings

 
Ben: “Graham then frog-leaps back to the hunter-gatherer days, suggesting that certain individuals in this low-tech society “by saving and implementing good new ideas – like creating wheelbarrows, ploughs and pots, [...] enabled them to produce more with less effort. Individuals with wheelbarrows were now wealthier than the “have-nots” who didn’t have them. The consistent opponent of inequality would have to denounce this improvement to the material conditions of man on account that it creates a two-class society and breaks the condition of high equality.”

To clarify, here my point was that equality in itself isn’t a good thing.  We don’t want to all be equally poor!  We want to be wealthy – i.e. we want to be able to achieve our goals with minimal effort.  Ben did not respond to my hypothetical about whether it’s better to have everyone equally wealthy, or to have some who are even wealthier.

The point that Ben picked up on was not related to my main point.  He asks “Ok – what were these individuals saving?”  In the paragraphs that follow, Ben seems to be under the impression that the concept of savings requires the concept of money.  This is not true at all.  Saving logically precedes money, and actually all exchange – an individual living alone can decide to save if he wants.  Saving (i.e. not consuming all that is produced) is a prerequisite for all capital accumulation, growth, development and technological advancement.  Obviously if all individuals in society consume 100% of what they produce (i.e. save nothing) they cannot invest in capital goods at all, so the society will not develop.  On this point see Irwin Schiff’s comic book How An Economy Grows And Why It Doesn’t.  In that story, you can see that Able’s savings (of fish, in this case), along with his ingenuity, were what enabled to society to develop, long before money developed.

So when Ben says this - “I would grant Graham the point that money became the tool to divide labour in a society facing real physical scarcity, but this does not grant money the noble title of being the enabler of technology.” – he has totally misunderstood what I’m saying.  Savings are the enabler of technology – not money.  And I certainly did not describe money as “the tool to divide labor”.  The division of labor logically precedes money as well.  The division of labor occurs spontaneously (if you want to know why – see this short video) and not, as Ben’s phrasing here would suggest, due to the foresight of some central planner giving orders, who in his wisdom decided to “divide labor” using money as a “tool”.  Finally, I don’t know what Ben means by scarcity, so I don’t know what he means by a “society facing real physical scarcity”.


 

Inequality

 
Ben says “Additionally, Graham’s argument is internally inconsistent. What’s being valued here, by him, and by me, is the wonders of innovation. Yet the data from the Equality Trust shows that Innovation is higher in countries with less inequality”

I do not see what is “internally inconsistent” in what I have said.  It would help me if Ben could explain why he thinks such data is relevant to our discussion.

Bank Job Losses

I appreciate your clarifying your purpose in bringing up the 45,000 jobs lost at Lloyds.  I am still not entirely sure what you are saying though.  It’s sad for the people who lost their jobs (just like it was sad when scribes lost their jobs), but from a resource allocation point of view, society is better off now that those people are freed up to do something useful rather than working in an unproductive bank job.  Do you agree with this?

Growth

Again, thanks for clarifying how you are using the term “growth”.  I am still not sure what your definition of growth is though, and I don’t understand your distinction between “good growth” and “bad growth”.  Could you provide explicit definitions?

Patents and Copyright

 
Ben: “In abstraction, patents are an expression of the market system.”

Absolutely not.  Patents are an expression of government-granted privilege, the exact opposite of the free market.  The same goes for copyright.

Ben: “It is the securing of a certain technology, system, or idea, externally restricted (owned) by one or more people in order to maintain a competitive advantage”

Indeed.  I have highlighted the crucial word: idea.  Copyright and patent laws are a government grant of monopoly privilege sanctioning ownership of ideas, and this is incompatible with libertarianism and free markets.  See Stephan Kinsella’s Against Intellectual Property.

Ben: “I do have a little trouble imagining how exactly a monetary system can function without any ownership or trademarked or copyrighted systems or products”

In addition to Kinsella’s piece, I recommend for you and Michele Boldrin and David Levine’s Against Intellectual Monopoly.  The former is more theoretical; the latter more practical. 

Again though, whether individuals in society use a money or not is irrelevant, so you ought to have said “a free market” in your above sentence, rather than “a monetary system”.

Planned Obsolescence

 
Ben presents some empirical evidence as a means to support his argument that “Every company in a monetary system is forced, by cost efficiency to… make items that are manufactured poorly”  He says “I’ll let the following iPhone4 breakage graph speak for itself”.

My interpretation of the graph is that if it shows anything at all it is saying that planned obsolescence of iPhones is clearly NOT happening.  If this graph were to support Ben’s view, I would expect the lines to start off fairly flat, and then spurt up quickly after 1 year or after 2 years – whatever the planned breakage date.  I ask Ben to explain how this graph could possibly support his case that iPhones are planned to break, and to explain what the graph would look like if iPhones were NOT subject to this so-called planned obsolescence.

 
But such empirical data is irrelevant anyway, and it actually highlights the point I was making earlier about the limits of empirical data.  I will suppose, for the sake of argument, that you are absolutely right that Apple are engaging in planned obsolescence – and that you can produce some empirical data that demonstrates this.  Then I will say (no doubt to your frustration, until you understand Austrian methodology!) that any malicious planned obsolescence that is occurring is occurring because we do not have a free market today.  I can always say this, just like you can always deny the relevance of things like Gosplan to what you are saying (which you did in your video).  This is the problem with using empirical data to critique societies.  That’s why we need economics (i.e. logical deduction) to inform our social theories.

As I have been saying, economics informs us that producers can get away with continually wasting resources only when the government protects them from their competitors.  Governments are heavily involved in all industries today (though some more than others), so it is possible that one of the ways firms today are wasting resources is by making their products deliberately break after some set period.  They are much more likely to be able to engage in such behavior in today’s hampered markets than they would in a free market.  In a free market, competition will eliminate such behavior to the extent that it is malicious to the consumer.  (I do not expect you to accept this point until you have read a bit more Austrian economics – if you don’t understand consumer sovereignty, then you won’t understand this argument.)  If you want to argue that planned obsolescence is a problem in a free market, and not just (allegedly) in today’s hampered markets, you will have to do so using economic arguments, not by presenting empirical data.

Technological Unemployment

 
After reading Ben’s further comments on this subject, I am left wondering: “so what?”  I have no idea why Ben thinks that automation (freeing up of labor) is some kind of problem for the free market.  I recommend again Henry Hazlitt’s “The Curse of Machinery”.  The great news about how quickly technology is developing today is all the more reason to embrace free markets, since they are the best possible system for responding to changes in conditions and shifting resources into the most valuable lines of production. 

 
Ben doesn’t directly respond to anything I said about automation in history or my hypothetical about doctors being made unemployed.  I have begun reading The End of Work by Jeremy Rifkin, but at this time I have no idea why he and Ben are so afraid of the effects of automation that they are (in Rifkin’s case, at least) willing to use coercion to “spread the work” (another fallacious concept Hazlitt addressed in his book: “Spread-the-Work Schemes”).

That will do for now.  As I said at the beginning of this post, I look forward to reading Ben’s response to the remainder of my original critique, and to his description of his vision of a Resource-Based Economy.  I am glad to hear that he has started reading some of the many works by Mises, Rothbard and Hoppe that are freely available online.  I particularly hope that he spends some time thinking about and reading about economic methodology before responding to this post.

Meanwhile, I will continue reading Rifkin’s book which Ben sent to me (not freely available online), as well as The Lights in the Tunnel by Martin Ford which he linked me to privately.  I have also started The Venus Project: The Redesign of Culture by Jacques Fresco.