Hello libertarians (and other strong supporters of liberty and--therefore--capitalism):
I contacted Jeffrey Tucker regarding the idea referred to below, and he suggested I put a post on this forum.
I stumbled upon a way to improve capitalism systemically and to accomplish everything any libertarian has dared to hope for--and more. The only thing that has to be changed is the approach to the money. This idea leaves the debate over having a metallic currency far, far behind. It actually harks back to the idea of neutral money, the concept that first attracted those who would form the Austrian School, and especially F.A. Hayek. It is impossible to summarize it in a post of this kind and do the idea, well, justice, but an essay of 3,000 words at www.ajustsolution.com presents a reasonably thorough introduction of it.
I must warn readers that the key to the idea is a money supply that is purely fiat money. Materially (as opposed to purely ideologically), the problem with fiat money has been that the supply of it can be manipulated--indeed, is designed to be manipulated--by a group of cloistered individuals making arbitrary decisions (thereby subjecting everyone else in the economy to their arbitrary wills--the very definition of injustice according to John Locke, and one that is consistent with my own account of justice). In my proposed approach to the money, the supply of it would be truly exogenously determined: No person, group, organization, or institution would have the means or the opportunity to alter the size of the money supply. Output would in turn be determined by that exogenous variable.
Again, the website is www.ajustsolution.com.
Stephen Yearwood:personally insulting me
I just re-read this thread twice. I didn't spot a single insult. Could you point out where the insult was?
Stephen Yearwood:I realize that I interjected a foreign idea into a community that is dedicated to a particular approach to economics.
It's not a foreign idea however. It is an idea which isn't economic, it is political.
Stephen Yearwood:My intent wan't to suggest that Austrian econmics is wrongheaded, only that this is another approach to the econmy that would accomplish certain goals that are consistent with libertarian thought, such as ending any reason/excuse for governments and central banks to 'manage' the economy, as well as ending any reason/excuse for transfer payments of any kind, while ending taxation altogether.
It is important to understand why those are goals of libertarianism in order to fashion an appropriate solution. The reason for rejecting state involvement, is to get away from the political means, and closer to the market means. If we're just applying the political means differently for a slightly different result (which is debatable how much of a change it will be) then we're not really making libertarian gains.
Stephen Yearwood:At any rate, no onewho has responded took the time even to read a relatively brief essay
It's not brief though. It is very, very wordy. If you could generate an 800 or 1000 word concise breakdown of the mechanics of your system, it would be much easier to digest.
Also, please see Lilburne's question. It's an important one.
Well economics is a deductive a priori science. If you start off with misconceptions about the market place then everything falls apart. You have to have a solid foundation such as the action axiom.
Here is a basic work that I think will help you to understand how economic theory works. It is a simple to understand text yet really profound.
Introduction to Economic Reasoning by David Gordon
'Men do not change, they unmask themselves' - Germaine de Stael
Stephen,
Your ideas are remarkably similar to those of C.H. Douglas. He came up with social credit theory: http://en.wikipedia.org/wiki/Social_Credit
His theory is one of socialism. The system you propose in your essay isn't capitalism, it's socialism.
Still, capitalism does have some fundamental problems. It is inherently unstable, and has always been dependent on governments and central banks to keep it from collapsing in on itself...
This statement is wrong. I tried reading through more of the essay, but so many falsehoods are put forth as facts. I can only take that so much before I have to stop reading it.
My intent wan't to suggest that Austrian econmics is wrongheaded, only that this is another approach to the econmy that would accomplish certain goals that are consistent with libertarian thought, such as ending any reason/excuse for governments and central banks to 'manage' the economy, as well as ending any reason/excuse for transfer payments of any kind, while ending taxation altogether.
By paying everyone the same in some scheme similar to Douglas' national dividend is to manage part of the economy. By your definition, that is un-libertarian.
All of that could be accomplished without having to defeat political liberalism because, at the same time, there would be no involuntary unemployment or poverty and a better chance, I'm saying, for environmental sustainability.
The environment is a resource. The market will allow society to sustain it's condition even in the face of dwindling resources. The market allows for more efficient and productive means of production to emerge. These new ways that will be revealed by the market will be the best way forward in guaranteeing environmental sustainability. Free individuals absent the state don't make the environment unsustainable. Activities of the state result in the unsustainability of the environment.
At any rate, no one who has responded took the time even to read a relatively brief essay, much less attempt to understand the full implications of the proposed change to the economy
I read it, and knew the implications. The price mechanism for labor would be crippled if people were to continue working as they were. People would then take occupations that were easy, seeing as everyone was paid the same. That is if they were forced to work. If they weren't forced to work, they just wouldn't work, and would look to gain in the black market (ie. free market)
before arrogantly brushing it aside and even personally insulting me. Surely some people in this community can do better than that.
It's because these are crackpot schemes we've seen before. I didn't come onto this site with my crazy schemes and tell people that I was right, nor did I demand that people read any other things that I wrote. I read the introductory material here and followed the discussions before getting involved in any of these discussions.
It would have been easier for you, had you just asked "can't we just pay everyone the same regardless of whether they work or not?" and left the body of your message at that. Instead, you wanted us to read your essay which doesn't draw from any great works, and it clearly shows that there is a lack of research backing the work, and a lack of understanding of economics on your part.
From your site:
In the early 1980's I developed a model of a different approach to capitalism. I then went to graduate school--Atlanta University--to evaluate it and to have people with Ph.D.'s in economics evaluate it; with their assent my Thesis was published.
I call bullshit.
Stephen Yearwood:At any rate, no onewho has responded took the time even to read a relatively brief essay, much less attempt to understand the full implications of the proposed change to the economy before arrogantly brushing it aside
Again, have you read any of the Austrian works, by people with well established roots in economic theory and recognized as experts in the subject? If not, then how can you expect us to read something, using some of the precious little time we have on this planet, that was written by some author with unknown credentials? Something, by the way, that has no references.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
Stephen Yearwood: I realize that I interjected a foreign idea into a community that is dedicated to a particular approach to economics. My intent wan't to suggest that Austrian econmics is wrongheaded, only that this is another approach to the econmy that would accomplish certain goals that are consistent with libertarian thought, such as ending any reason/excuse for governments and central banks to 'manage' the economy, as well as ending any reason/excuse for transfer payments of any kind, while ending taxation altogether. All of that could be accomplished without having to defeat political liberalism because, at the same time, there would be no involuntary unemployment or poverty and a better chance, I'm saying, for environmental sustainability. Even if one doesn't think those things are problems, doing away with them would hardly make the world a worse place. Perhaps for some people the only real goal is the defeat of political liberalism. At any rate, no onewho has responded took the time even to read a relatively brief essay, much less attempt to understand the full implications of the proposed change to the economy before arrogantly brushing it aside and even personally insulting me. Surely some people in this community can do better than that.
I realize that I interjected a foreign idea into a community that is dedicated to a particular approach to economics. My intent wan't to suggest that Austrian econmics is wrongheaded, only that this is another approach to the econmy that would accomplish certain goals that are consistent with libertarian thought, such as ending any reason/excuse for governments and central banks to 'manage' the economy, as well as ending any reason/excuse for transfer payments of any kind, while ending taxation altogether. All of that could be accomplished without having to defeat political liberalism because, at the same time, there would be no involuntary unemployment or poverty and a better chance, I'm saying, for environmental sustainability. Even if one doesn't think those things are problems, doing away with them would hardly make the world a worse place. Perhaps for some people the only real goal is the defeat of political liberalism. At any rate, no onewho has responded took the time even to read a relatively brief essay, much less attempt to understand the full implications of the proposed change to the economy before arrogantly brushing it aside and even personally insulting me. Surely some people in this community can do better than that.
I truly hope you do not take what I am to say the wrong way, because I really hope you will stay, ask questions, and genuinely learn from this community and the wonderful resources at mises.org. The idea that you are failing to grasp is that your proposal is not "another approach" but merely a repackaging of the same fallacies and solutions to non-existent and even strawman interpretations of capitalism that have been demolished many times over. It's not that we are arrogantly brushing your idea off out of a sense of superiority or closed-mindedness, but it is rather that most people here possess an economic understanding that enables them to recognize when such fallacies in logic crop up. Based on your article, I sense in you a genuine willingness to overcome some of the economic problems that we have in our society today. Many here share your concerns. The best advice I can offer you is to seek out knowledge and learn about Austrian economics, so that you may understand where we are coming from with our criticisms. I also leave you with this bit of wisdom; do not allow your own personal investment into an idea to preclude you from inquiring about the knowledge of others, and do not be personally hurt if your ideas are rejected by others. Try to understand the reasons why others reject these ideas, and do not be afraid to relegate them to the trash bin when a better explanation presents itself.
Welcome to mises.org. I hope you find your stay fruitful and stimulating.
As many people already said, you need to understand the world properly before trying to "fix it".
I read the whole economic portion of your essay. Would you mind reciprocating and answering my question?
J. Grayson Lilburne: In a market economy, people qua producers use market prices of scarce resources to optimize allocation of those resources for the best servicing of themselves qua consumers. Wages are the price of the scarce resource known as labor. In your proposed economy, in which wages for "common labor" are abolished, how would people qua producers know how to best allocate labor?
In a market economy, people qua producers use market prices of scarce resources to optimize allocation of those resources for the best servicing of themselves qua consumers. Wages are the price of the scarce resource known as labor. In your proposed economy, in which wages for "common labor" are abolished, how would people qua producers know how to best allocate labor?
In case the question wasn't clear, I'll elaborate.
The real world is always in flux. Preferences change, needs change, material circumstances change. Every change means that whatever arrangement of the means of production best provided for people before, no longer does. How many carpenters in Portland is best? How many garbage men in Chicago? How many nurses in Wichita? How many computer technicians in Albany? It is impossible to know the answers to the flurry of such questions that arise anew with each passing moment in the kaleidoscopic world of change we inhabit. And it is impossible for any single individual or bureau to even approximate the answers.
The only thing that can approximate the answers is the labor market. And this is how it does it: changes in the data of the world shift consumer demand from one segment of the market to another, bidding down prices in the former and bidding up prices in the latter. This induces the producers in the now-less-important industry to reduce its workforce and wages, and producers in the now-more-important industry to increase its workforce and wages. The lower wages discourage workers from training for and entering the now-less-important industry, and encourages workers to train for and enter the now-more-important industry. Thus do people qua workers shift production in order to best provide for themselves qua consumers under ever-changing circumstances. And again, such new circumstances are ever emerging in a mind-bending flux.
Under your procrustean near-equalization of wages, the labor force would be completely deaf to the ever-humming chorus of price signals. Every increase in demand for Medicine A would go unheeded, because the concomitant increase in demand for workers to help produce Medicine A would have no effect on wages for those workers. Without enough workers to produce it, calamitous shortages of Medicine A will result.
And who would help satisfy the demand for sanitation workers or a deep sea fisherman, when you could be a receptionist, or a babysitter for the same amount of pay? Billions of misallocations like these will occur under your system.
You say your government wouldn't give order to your economy; it couldn't even begin to address those billions of misallocations anyway. But, as I've demonstrated, the market wouldn't give order to it either, because your system would cripple it. So these billions of misallocations would simply go unaddressed, and they would drag everyone in your system, first into slowed growth, then into stagnation, and finally into abject squalor.
Now, there's a good question. Keep in mind that in the system I'm proposing only common labor employed by businesses is paid the allotted income. All other employees in every business are paid out of the revenue of the business. Every business decides for itself which positions fall into which category. So, to retain any particular employee who the business deemed performed something more than common labor, the business would have to negotiate a salary with that person. Labor would be allocated for the whole of the economy in that fashion.
The only thing I'm out to "fix" is our economic system as it now exists. Again, I'm offering an alternative to Austrian economics that accomplishes things that every libertairan wants and, it so happens, also accomplishes things every liberal wants. That, I'm saying, would make it infinitely easier to accomplish, politically. Surely we aren't so poisoned by ideology that we would forego what we want just to keep liberals from getting what they want.
You might want to see "About the Author" on ajustolution.com.
That is a large improvement in manners, but, as I'll be saying many times in replying to as many of these responses as I can (with some inevitable triage), I'm not saying there is anything wrong with Austrian economics. I'm talking about somehting different--and new--that is aimed more at adherents of the more general philosophical perspective of libertarianism.
[Sorry, folks--I thought when I clicked "reply" the machine would direct my response to the appropriate place in the thread. I'll do better. The response immediately following Grayson (I think the name was) about the allocation of labor refers to that post. the others are messed up, but mostly they could refer to any response so far.]
Re Spideynw: Einstein was an unknown patent clerk with only an undergraduate degree and no previous publishing credits when physicists accepted for consideration his startingly original ideas about the nature of the universe.
Please allow me to say a general word about another common response, that what I'm proposing is really some form of socialism. I'll quote from the essay to which this thread alludes: "Liberty would be maximized; the profit motive would drive the economy; the free market would determine what was produced, in what quantity, and at what price; and there would be no limit on how much money anyone could earn or how much property anyone could acquire." Oh, and there wold be no taxes. Come on. If that's socialism, we should all be signing up.
I'm talking about using the democratic political process to chnage our entire approach to money, but only that.
Stephen Yearwood:Surely we aren't so poisoned by ideology...
it's comments like this that further affirms for me that it's not about an intellectual argument that you are putting forth but rather some kind of impulsive, high time preference, base-level effort clung more to the ego, "I'm out to 'fix'...".
unfortunately the sale is turning me off to not only deny the product but to leave the store and puke.
Re: Wilderness
Interesting response, given the epigram that follows it about "Kissing ass" being, apparently, too common. Certainly, no one is under any obligation to consider what I have to say, but to claim that one isn't going to read it, much less attempt to truly understand it, because one didn't like the "sale" is to put forth a bad excuse that wasn't the least bit necessary, anyway.