Tuesday, July 31, 2012

Happy 100th Birthday to Milton Friedman

I realize that Friedman is not an Austrian economist, but his rebuttal to Donahue's assertions and assumptions are timeless.



Thursday, July 12, 2012

Rebuttal to Massimo's Libertarian Contradiction

This is a direct rebuttal to Massimo Pigliucci's post about the apparent contradictions of Libertarianism. To read - http://rationallyspeaking.blogspot.com/2012/07/fundamental-contradiction-of.html

  One of the problems with M's post is he is attacking the Libertarian Straw man to begin with. There are different forms of Libertarianism and Massimo has apparently picked a form called "bleeding heart Libertarianism". I will retort by answering from a pure Libertarian perspective and hopefully explain what that means.

Massimo starts right out by saying "as is well known, the core idea of Libertarian philosophy is the preservation of the maximum amount of freedom"

 I am arguing from what I believe to be the pure form of Libertarianism. That is Anarcho-Capitalist Libertarian. For detail on pure Libertarian system beliefs read "For a New Liberty" by Murray Rothbard. This book explains true Libertarianism that is consistent throughout. http://mises.org/rothbard/foranewlb.pdf

So, no, Massimo, freedom is not what is at the core. It is only partly. The core starts with the Libertarian Axiom - The Non aggression axiom -It states, simply, "that it shall be legal for anyone to do anything he wants, provided only that he not initiate (or threaten) violence against the person or legitimately owned property of another." (for more detail on this see - http://www.lewrockwell.com/block/block26.html). The other core aspect of Libertarianism is property rights. That is you own your body and all its production. You and you alone, no exceptions! These two principles combined are the core of Libertarian philosophy.

  It is important to understand why the non-aggression axiom and property rights are the core beliefs of Libertarianism. The reason is the understanding that all disputes and conflicts in the world comes from scarcity. This is an important concept to understand so I will explain Hoppes method. Lets pretend that you and one other man lived in the garden of Eden.

  If we lived in the garden of Eden, that is, where all goods were superabundant the same way air is, there is no reason or means for dispute or conflict. If any good imaginable was available in unlimited quantity (superabundant) there could then, arise no conflict.

 The above statement is true except for two things that would not and could not be superabundant, that is your body and the exact spot you are standing on. These two items could still be disputed over. Your friend might want to stand exactly where you are standing, or vice versa. Or your friend may want to do something to your body or vice versa. Besides these two items (because they cannot be superabundant logically) there can not arise any other disputes or arguments over anything.

  This is important, because it allows you to see the fact that it is scarcity that drives all conflict between people. Were goods not scarce there could not be conflict.

   So with this understanding of what causes all conflict between humans preventing peace and the fact we do live in a world of scarcity, we must have rules that will help avoid conflict. This is why the Libertarian believes in property rights and Non-aggression axiom. In a world of scarcity, there must be some way to assign ownership of the scarce goods and one's body so that we can avoid dispute.

  If you say, "Well, no one owns the goods (private property) and their body," then this obviously does nothing to prevent conflict and will obviously lead to massive conflict and disagreement.

  If you say everyone owns everything equally, well, that does not seem to be a way to prevent dispute, but only a way to increase it. Some simple thought experiments should easily show you this system of equal ownership will cause massive conflict and disputes.

 But if you say everyone owns their own body and all that it produces, then this is a way to avoid conflict and dispute.

 This is why many call this "Natural Law". It seems obvious A priori. We know from a very young age that it makes sense for items to belong to people. For our bodies to belong to ourselves. And this reasoning is why Libertarians hold property rights and the Non-Aggression axiom as the core of our ideology. It is the only system that has a logical foundation that limits dispute and conflict to the absolute minimum. It is not perfect. There are gray areas when it comes to what non-aggression and property rights will mean, (if I set up a windmill on my property and it makes vibration on your property, etc. etc.) but it is still an excellent starting point. And logically the only starting point.

  What does Massimo think of property rights? I have no idea. My guess is it is some quasi-socialists view of property rights, but rather than attack a straw man, I hope he will answer that question.

  So back to Massimo's, article. He calls the inescapable contradiction of libertarianism the fact that you cannot have freedom without limiting freedom. This so called inescapable contradiction comes from Massimo not really understanding Libertarianism and using "Freedom" as the core belief. So he goes on to attack a straw man. Unfortunately in the comments to follow by some supposed Libertarians, they repeat his assertion that Libertarianism is about maximum amount of freedom. Freedom is important, but it is part of the non-aggression axiom, and if you understand the non-aggression axiom and property rights, you have totally debunked Massimo's so called contradiction. In fact, the contradictions will be completely owned by Massimo, once he confesses what he thinks should be in place of property rights (I do hope he will answer this question).

  Then Massimo goes on to say libertarians are not anarchists. Yes Massimo, that is exactly what we are! It is the only way to be consistent. In his very next straw man statement he goes on to say how we (Libertarians) understand freedom is only maximized by government regulating the rules of engagement between people.

  No Massimo, I don't believe for an instant that we need government to do this, that is what you believe. I believe that the market can provide protection services infinitely better than the state can (and it often does where the state allows it to). I don't believe giving a group of people a monopoly on police service is the best way to regulate peoples engagement. For some reason the Liberal hates monopolies, but thinks when a monopoly is owned by the state, it's wonderful (apparently bureaucrats given monopoly rights become altruistic). This is one of M's contradictions, but I'll let him answer to it.

  The two fundamental rights of life and property do not require government regulation. Massimo again states the straw man argument that these happen to be the only two rights in which we believe. Since this again comes from Massimo's lack of understanding of true Libertarianism, I won't hound on this straw man point. If you understand the actual foundational axiom of libertarianism, it will make more sense when it comes to freedom of speech, gay rights, etc...

  Next we turn to his argument of the government vs employers infringing on our rights. In order for this argument to work, Massimo must set up the employer to be an entity similar to the state. It must have some power of coercion over you as the state does. So is this true? Do employers have the power of coercion of its employees?

   So first he (or the article he is quoting) sets up the idea that workers are not really free to quit our jobs. And if I think I am free to quit my job, then I believe "such a preposterous myth that its a wonder how intelligent adults entertain it".

   I find this an odd thing to say, since I personally have quit my job 7 times in my short 41 years. Each time it was due to getting a job which gave me higher subjective utility. This is the case for the average American who works in the Market economy. Most Americans change jobs multiple times in their lives, and most of those changes are by their choice, not the employer. If I had to bet, I am willing to bet Massimo has changed jobs multiple times in his life by his own choice and not his employer. I work for a wonderful bio-tech company, yet people quit here every day to increase their utility. The fact is, that the number one reason people quit their jobs is because of their immediate boss. It is not that they are being made to keep their babies and not have abortions, nor that they are being forced to urinate for drug tests daily. It is just because they do not like the way they are treated by their direct boss. Most people when interviewed, say it was not the company that was the problem, but the way their direct boss treated them.

   So by Massimo's logic that this relationship between market companies and their employees is one of coercion? Is that the truth? It is complete bunk. Massimo's own life is proof of it.

M says we grant business the freedom to do all sorts of crazy things like invade our privacy and so on, but object to the state intervention to protect workers rights. He completely misses the point that the workers rights are in tact even if a business wont grant them, because our association with business is truly voluntary. This desperate attempt to show that we are not in a voluntary arrangement with our employer goes against simple logic. We choose said employer because it was the best of all options. This can make it difficult to leave a job at an instant because our standard of living is usually more important to us than a particular right at a given time, but that is still a choice we make, not our employer.

"It is often not the case that an equivalent or near equivalent employment can be found elsewhere"

 This is absurd for a couple of reasons, mainly because you are not entitled to any employment, none. For most of human history, we lived at bare substance levels where man hunted for each meal or grew each meal, lived in a shelter he constructed with the materials from that spot. It was the market economy that lifted man from this state (not government). A person always takes the best job available to them, this is the only reason it may be difficult to find equivalent employment. Once a better job opens, we quit the one we have and take the better job. So by this logic, once an employer offers a person the job that is better than all others for him, he has now engaged in a coercive relationship with that person. This, according to Massimo, puts the employee at a disadvantage to the employer. I hope I have made apparent the absurdity of this logic. Each one of us has many options for employment. We all work in what we believe is the best of those options. It does not mean that the one who is providing that best option is coercive. If they infringed on anything that was important to us, we wouldn't have chosen them in the first place, remember, we went there because we liked it better than everything else.

   It is the lack of analyzing a market economy that could make someone think like this. All of us always take the best job open to us. The one that increases our utility the most. If there were other jobs that had higher utility, we would (and I have 7 times) taken it, but by Massimo's logic, because the employer has increased our utility over other employers, we are now in a coercive relationship. Its just like being a slave. Shame on the employer for giving you a job that is better than all your other jobs available to you! Now your being coerced because you don't want the 2nd best job available to you.

In a true free market economy, you are always free to compete with your employer as well. Yes this is very difficult to do today, but that is because the hurdles the state has put in the way. Imagine trying to start a company? This is next to impossible because of the state. Large business lobby the state to install massive regulations which they are in the position to adhere to, but make upstarts extremely difficult. Remove the state massive amount of regulation and hurdles and taxes. Upstarts would be rather simple, and that would be another option for the worker, to become the entrepreneur and compete against your employer.

  Then he goes on to say it is this type of asymmetry that made possible child labour and working weekends during the Robber Baron era. This actually gave me a chuckle, because it was followed by the usual myth that unions and government regulations took us from this this time period. During this period early in the 20th century, Unions accounted for on average, 3% of total private work force. Child labor fell drastically before the child labour laws were in place.

  But just to entertain M's logic here. Lets assume that 3% of the workforce which was unionized led us out of working weekends. Lets assume that government laws led us from child labour.

   If you are a family with 2 children ages 11 and 13 and both are working. Why are your children working? Is it because you are an evil parent? Or does this offer your family the best possible standard of living? Lets assume for a minute that the parents just happen to want what is best for their children (I realize the truth must be the state knows and wants what is better for the children more than the parents but entertain me here), let's just assume the parents do indeed love their children and want whats best for them. If  both children are working, is this the best of all possibilities for the family? Economics says it is! It says the parents do want what's best for the family, and if they are working, it is likely making their lives better than if they were not. It is likely because if they do not work, the whole family is worse off. So if the government makes a law "No children can work", are the children better off or worse off? (again assume the family's first choice, which is its current arrangement, is the best, as an economist or a Praxeologist, you must assume this). So by definition, any child labour law only has the ability to make life of said child worse be removing the families first choice. Simple economics 101 says that you can never make someone's life better by removing their first choice.

  If you say the government law prohibiting the children from working actually makes their lives better, then you are saying that the family actually has a better option, they were just too stupid to take it. And this new law will make them more prosperous. It must have been right there all the time. Mom and dad were just too stupid to see it.

  What removes child labour is progress in the market, not government. The market increases the family's wealth to the point where the family no longer needs the additional income to eat, pay rent etc... Just simple economics 101 tells you that government regulation cannot increase a family's utility. In fact if you prohibit a family that's first choice of having their children work, from having their children to work, you have decreased the children's standard of living. You have just removed the families first choice, and they are now forced to move to another choice that doesn't involve the children working. You must assume their first choice gave them  the best standard of living. So what does government laws prohibiting child labour actually do?
  Thankfully, in the United states, these laws were not made until the child labour had already all but disappeared. Had they done it before, they would have destroyed children's lives.

  In other countries where they have made this mistake, they have increased child prostitution and forced families into "other choices that are not their first choice". Thank God for the state who knows better than the family does what's best for them, huh?

  Economics as a science is value free. It must be if you are to understand what actually happens. Praxeology is value free.

As far us Unions and their 3% removing us from weekend work? Hopefully I don't have to explain why it would be impossible for 3% of the work force over the other 97% into not working weekends. It was actually again market forces and competition for labour that removed us from weekend work, not unions. In principle, I have no problem with unions, so long as it doesn't violate property rights and the nonaggression axiom. Unions naturally die off in a free market because they tend to artificially increase the rate of compensation. The business must take these additional costs from somewhere. Most people think the big evil employers can just take it from their massive profits, but they must compete with another company with non-union labor making less. So in the free market Unions die out usually within a few generations. The only way they survive long term is when the state channels money from the tax payer to the unionized company.

Those evil Robber barons took oil from well over 30 cents a gallon down to pennies which made a whole nation more wealthy, but that's a topic for a separate post.
  
  Massimos next point, why do us kooky Libertarians not apply the "you can always go somewhere else" argument to the state? The state is not a voluntary arrangement. It is strictly coercion. As I hope I have shown, his arrangement with any business is 100% voluntary. You can leave it and still keep the home you own. The land you own. It is yours. No employer infringes on your property rights. The state steals from you at gunpoint! It doesn't own my land, yet it says I must pay them for the honor of owning it. This is exactly the same as the mafia. What is the logical difference between the state and the mafia? That I can vote for who will steal from me? They literally force me by gunpoint to pay them money. Don't think so? Stop paying your taxes! Tell them you're no longer paying them! Men with guns will come to your home and take you to jail. What gives the government this right? Because a bunch of people vote. I didn't vote for anyone to steal from me? I don't want anything from the state!

   And you can spare me there wouldn't be roads, schools, and all the other bunk. Simple rule of economics, if there is a demand, the market can and will fill the demand. You cannot logically distinguish demand for education from demand for shoes when it comes to economics. You just assume because the state currently provides things like roads and schools and police, that it must or they won't be there. It's a logical fallacy that has been dis proven.

One other point I would like to make because you quoted it. The Hobbesian theory that we are all wolves of each other is bunk. Read http://mises.org/journals/jls/3_1/3_1_2.pdf

An American experiment in Anarcho-Capitalism, The Not so Wild West. This paper shows some proof of the spontaneous organization of markets and life in anarchy. There are very limited real life examples of anarchy, people always confuse anarchy with chaos and Hobbesian philosophy, but evidence says otherwise. It is the state that always causes war. Once men are given monopoly power of coercion (real coercion, not made up employer coercion) they cannot live in peace.