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How can one be a Chicago-school advocate and "anarcho"-Capitalist?

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im_retarded posted on Mon, Jan 31 2011 7:53 PM

I've read that David Friedman considers himself to be more "Chicago" than "Austrian" but he's also a market "anarchist."

How does that work out? Don't the pillars of the Chicago school involve some government intervention, like fiat currency, central banking, &c.?

Also, a big part of the reason I don't understand is because I'm not particularly well-versed in the Chicago school. I only just recently became interested in economics and I've been "reading up" on the Austrian school (yes, I do plan on learning other schools, but I'm trying to take it one step at a time right now).

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The pillar of a school is it's method and methodology, never it's policy conclusions.

The pillar of the Austrian school isn't libertarian market anarchism, it's praxeology and a causal-realistic theory. 

There is no a priori reason why the Chicago method couldn't support anarchist conclusions. 

The state is not the enemy. The idea of the state is. 

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Think of the methodology before thinking of the conclusions reached by certain adherents

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"There is no a priori reason why the Chicago method couldn't support anarchist conclusions. "

Because they reject a priori anyway.

And wouldn't a priori be necessary to anarchism, given that it is not empirical?

I know Milton Friedman rejected it out of hand due to not know any cases outside of medieval iceland.

 

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And their methodology is positivism, right?

Normally I'd agree that policy or theory conclusions wouldn't matter, but "anarchism" and their policies (not methodology) are incompatible as far as I understand. Through the methods they've seemingly come to the conclusions of minimal intervention. How can they support "anarchistic" conclusions when they've also seem to come to the conclusion of market interference?

To me, it's like the a priori "all unmarried men are bachelors" but then the bachelor gets married.

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im_retarded:

And their methodology is positivism, right?

Normally I'd agree that policy or theory conclusions wouldn't matter, but "anarchism" and their policies (not methodology) are incompatible as far as I understand. Through the methods they've seemingly come to the conclusions of minimal intervention. How can they support "anarchistic" conclusions when they've also seem to come to the conclusion of market interference?

To me, it's like the a priori "all unmarried men are bachelors" but then the bachelor gets married.

 

I know of no economic school that is strictly 'positivist'. It's always a hybrid between empiricism and theory, between induction and deduction. But, for short, yes: positivism. 

Not everything associated with the Chicago school supports the policies you mention. Milton Friedman was part of the Chicago School, but it's not like he 'was' the Chicago School. 

 

The state is not the enemy. The idea of the state is. 

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To paraphrase Friedman, don't get too hooked up on economic schools.

Freedom has always been the only route to progress.

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mahall replied on Mon, Jan 31 2011 10:09 PM

My impression was the Chicago School's main fault was it's faith in monetarism. I was also under the impression that fiat currency is diametrically opposed to market anarchy currency.  

If my impressions are incorrect, how so? If they are correct, how can a self-proclaimed Chicago-ian be an anarchist?

 

Also, what is the mistake in methodology of the Chicago School?

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this is a good question to ask D. Friedman... He might respond to this post since he does observe the forum sometimes.

My Blog: http://www.anarchico.net/

Production is 'anarchistic' - Ludwig von Mises

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I'm pretty sure that we already had a thread like this one, where David Friedman did respond. Use the search function.

Also, he had mentioned before that he has something like a search engine sending him reminders of when his name shows up. He's like the Batman of scholars!

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I agree with you that Chicago School needs to rethink about it's decision on  monetarism.The monetarist economic policy based on a stable growth of the money supply. It adopted M. Friedman's theory that all economic woes came from irresponsible money printing by governments. By limiting the government to targeting money supply objectives its role would be neutralized.

 

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I'm tempted to consider OP to be a troll...

Yes we just had a similar topic regarding the Chicagoites and David appeared. While I consider myself an Austrian, I do think he and his father put it best in saying there is in the end fo the day just good and bad economics. As others have noted there is no reason why a Chicagoite cannot be an AnCap. Similarly Austrians are not mutually inclusive with market anarchism, and unless I am incorrect the majority of Austrians are not anarchists at that.

http://mises.org/Community/forums/t/22350.aspx

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I'm tempted to consider OP to be a troll...

Wow. Seriously? Did you not see the part where I conceded to not knowing much of the Chicago school?

Also, a big part of the reason I don't understand is because I'm not particularly well-versed in the Chicago school. I only just recently became interested in economics and I've been "reading up" on the Austrian school (yes, I do plan on learning other schools, but I'm trying to take it one step at a time right now).

Anyway...

...yes, this is the thread where I discovered (for the first time) Chicago-school "anarchism". David Friedman is still the only Chicago-school market anarchist I'm aware of or that I've ever seen, every other "anarcho"-Capitalist I've met is Austrian. I'm pointing this out because I'm interested in the possibility of this and how this works out. While David replied to your thread, he didn't seem to explain how that works out, and no one questioned that. I don't mean to get caught up in the "schools" but as I've already mentioned the ends don't seem to justify the means, where "Chicago" seems to support minimal intervention and thus can't be anarchistic. Since it obviously can somehow, as David is one of the more prominent market anarchists, there is something I'm clearly missing and not understanding. It's like the first two sentences Mahall wrote.

-Hold on, methodologically speaking, since "positivism" is technically the pillar of the Chicago school, (as AdrianHealy has pointed out, it's not strictly positivist) a Chicago school anarcho-Capitalist would just use positivism instead of praxeology? Is that how David differs from us, and how you can be a Chicago-school advocate and anarchist simultaneously? Is that what I'm missing? If that's the case then I understand now and didn't understand previously because I had difficulty seperating the theories from the schools.

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I apologize if you are not a troll, however in my defense the phrasing of your initial question seemed to me to be a flamebait for our resident non-Austrians; amongst other things.

If you are interested how D. Friedman applies his teaching as a Chicagoite to the question of whether anarchy is viable or not, I suggest reading the Machinery of Freedom. I find it an accesible book for most layman and recommend it, along with Blocks' In Defense of the Undefendable, as a good first step towards understanding a free market approach to politics.

http://www.voluntaryistpunk.com/ebooks/The_Machinery_of_Freedom_.pdf

Like others have noted, the difference between 'Austrian' and 'Chicagoite' anarchism is largely in which economic school they use to justify their stance. Although I find it note worthy that there seems to be a concentration of natural rights proponents within the Austrian circle. Not that its something inherent. It might be better to say Rothbardians tend to be of the natural rights sort.

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1. As someone already said, the schools of thought are defined, insofar as they can be defined, by methodology. If you define them by conclusions, you might have problems with Mises' support for the draft and state subsidy of opera.

2. I don't know what you think "monetarism" is. The quantity theory of money and its implications apply to commodity money, fractional reserve money, fiat money, any other monetary system you can think of. As it happens, my father wrote an essay on the optimum quantity of money and I pointed out that the behavior of the quantity which he argued was optimal was what would be produced by a system of competing private issuers.

3. There is no inconsistency between fractional reserve money and anarchy--and the lower the fraction, the closer fractional reserve money comes to fiat money. On the historical evidence, fractional reserve money, not commodity money, is what free market banking produces.

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