" And the reason why I made that conversion is important. Libertarian insights in a lot of ways are basic, Econ 101 insights about the efficiency of free contracting writ large and converted into norms or political values. In other words, I think one of the most essential libertarian fallacies is building a politico-ethical system around positive social science findings (and, I want to stress, basic and introductory social science findings at that). It's kind of an odd way of going about formulating a politico-ethical system. We don't adopt Nietzschean super-man ethics because of evolutionary biology, and we shouldn't simply adopt libertarianism because of these insights. I want to be clear - my point is not that you have to mix up normative and positive findings to come to libertarianism. My point is only that it's possible to get everything there is to get out of libertarianism simply by improving people's knowledge of social science. This is only to say that it's not entirely clear to me what should be important here: teaching people more social science, or sharing libertarianism. But even that isn't entirely satisfying - after all, the reason why I abandoned libertarianism was because I kept learning social science. Yes, the market is efficient and the price mechanism leverages decentralized knowledge. But if institutions don't or can't internalize costs and benefits social scientific insights start to militate against the efficiency of markets. Uncertainty and imperfections ensure that market forces, as fantastic as they are, are going to remain sub-optimal. I haven't abandoned any of the introductory insights in adopting these views - the complement the introductory insights that I still use. I still have a relatively contractarian view of human relations. I still take a fairly atomized, individualist view of things. I still come down on Hayek and Mises's side of the socialist calculation debate. But I can't call myself a libertarian. So, if what we really want is to get people to take the implications of social science more seriously, then its not clear that that would move people towards libertarianism either." -Daniel Kuehn
I think this is an interesting insight, though I find issue with it for this reason: Did Rothbard not "keep learning social science"? What about Walter Block, or other career Austro/Libertarians? Is there an implication that in order to maintain Libertarianism, we must stop at elementary observations? I'm sure DK can clarify if he wishes, and I hope he does. Anyway, thoughts?
Listen, LS, I don't have all day to sit around and go back and forth with you here. This is why I comment so irregularly. If you have a point, then please just say it. Who are people? Umm, I..don't know, people? Is this an attempt to embroil me in a debate or what?
How is my argument a strawman?
And when you say "you guys" who exactly are you talking about? If it's me then perhaps you need to reread my previous posts if you're unsure where I stand on this issue.
Othyem:Who are people? Umm, I..don't know, people? Is this an attempt to embroil me in a debate or what?
I just want to know who the people are you are reffering to. It's not a big deal. If you meant everyone, you just have to say everyone.
Othyem:How is my argument a strawman?
Who claimed that an intervention necessarily leads to less satisfaction for the transactors?
Othyem:And when you say "you guys" who exactly are you talking about?
You guys are anyone who refer to government as a collection of institutions. That's a delusion, and I would be happy to debate you if you feel otherwise.
Othyem:Can honesty force you to objectively define better? LS, Yes. Greater ex post utility. In other words what the transactors would have done had they had all the appropriate information. To deny this is for one to tacitly accept that he or she knows absolutely everything about the future, otherwise how else could one claim that an intervention necessarily leads to less satisfaction for the transactors? Markets maximize ex ante utility and that's all I'm willing to admit a priori.
LS, Yes. Greater ex post utility. In other words what the transactors would have done had they had all the appropriate information. To deny this is for one to tacitly accept that he or she knows absolutely everything about the future, otherwise how else could one claim that an intervention necessarily leads to less satisfaction for the transactors? Markets maximize ex ante utility and that's all I'm willing to admit a priori.
How does one measure utility or determine whether a given piece of information is appropriate? With the former, even under the widely recognized Von Neumann-Morgenstern Utility Theorem, there's no way to make interpersonal utility comparisons that isn't inherently arbitrary. Regarding the latter, is the task of economics to discover how people do act, or how they could act?
Othyem:I don't think I'm saying anything that's particularly controversial. My position is merely that *theoretically* in some idealized instances government can help bring people's plans in alignment to what--ex post--would bring them the most satisfaction, taking a gods-eye view. This is presumably Daniel's belief, although he would lay less stress on the theoretical part and claim it can do this often. In fact this is the orthodox economics position. Instead of dismissing this as wrong we should instead be emphasizing how such attempts to optimize are beset by impossible knowledge problems as well as public choice incentive problems. The market economizes on this, the government does not. It's mistaken to think by admitting the government can sometimes clumsily stumble onto an answer and "get it right" that I'm somehow giving the green light for interventionist policies.
It's worse than that, as LS has implied. The thing is, there is no answer to begin with.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
Student:First, when I was talking about normative beliefs, I was explicitly referring to the fact that when you are evaluating a market outcome as being optimal or non-optimal (or more efficient or less efficient), you are having to make value judgements. This is why welfare economics (the branch of economics that tries to answer what exactly we mean when we use these terms) is inherently normative: http://en.wikipedia.org/wiki/Welfare_economics
http://en.wikipedia.org/wiki/Welfare_economics
You understand that normativity is necessarily subjective, right? That means no one else is obligated (prima facie or otherwise) to go along with your particular normative criteria. It also means that any and all such criteria are inherently arbitrary.
Student:Second, when I am talking about efficiency, I am using the mainstream economic definition. That is to say, when you talk about gains in economic efficiency, you are a person "outside the market" looking at market outcomes and talking about improvements along some sort of normative standard. An example would be Kaldor-Hick efficiency: http://en.wikipedia.org/wiki/Kaldor-Hicks_efficiency
http://en.wikipedia.org/wiki/Kaldor-Hicks_efficiency
This has the same problem as above. Furthermore, it seems questionable to me as to whether Kaldor-Hicks efficiency relies on the necessarily subjective value judgements of the market participants with regard to being "better off" or "worse off".
Student:The reason I keep bringing up this point the is that it seems very odd you have no problem saying this or that is more efficienct (applying a normative criteria to market outcomes given available information), but blow a gasket when DK says a market outcome is sub-optimal. Indeed, based on that single term you assume that DK must be referring to a notion of optimality that can only be defined in terms of a static equilibrium. If that is what DK meant I think you would have a point. But I have never read anything by DK that would suggest he believes such an antiquated notion. Certainly not in the OP. I think you may be reading way too much into that single term.
I highly doubt that Catalan is using the same definition of "efficiency" as you are, so you're both probably talking past one another more than you're talking to one another.
re: "I know I've argued the same thing before with him; how can you agree with Hayek on calculation, and then go ahead and claim that you have any real inkling of knowledge on what is optimal and what isn't?"
As you say, Jonathan - we've been over this before.
Agreeing with Hayek on econmic calculation says nothing at all about any kind of global efficiency. And nothing in Hayek denies inklings about optimality.
When you look at rent control you have an "inkling" about the direction of optimality, right? You can have that without knowing exactly what an optimal quantity and price for rental housing is. I'm not the one here that is misunderstanding Hayek.
I want to clarify - I believe I wrote this a while ago.
Specifically, I want to take back any implication that libertarianism is simplistic when I refer to Econ 101. What I'm getting at is that a lot of libertarianism is simply a ratification of what we know about market efficiency. My point here is that (1.) what we know about market efficiency is very complicated, and (2.) a solid libertarianism ought to justify its ethics on its own, regardless of the positive claims of economics which are much more complicated than they are often presented.
Daniel Kuehn:Agreeing with Hayek on econmic calculation says nothing at all about any kind of global efficiency.
How do you calculate efficiency globally?
Daniel Kuehn:What I'm getting at is that a lot of libertarianism is simply a ratification of what we know about market efficiency.
Libertarianism has nothing to do with market efficiency, and everything to do with morals and philosophy. Market efficiency is a middle way used to bridge different moral and philosophical stances to demonstrate the consistency of libertarianism, but is not actually a justification for libertarianism because value is subjective.
In other words, just because you can prove that water is consistently wet, doesn't imply that wet water is a good thing.
I said that "a lot of" it is - a lot of people treat it as such. And I specifically noted that the moral/ethical foundation is the better way to approach it (I personally think there are issues on an ethical/philosophical side but that's another discussion).
re: "How do you calculate efficiency globally?"
Who said you can?
Daniel Kuehn:I said that "a lot of" it is - a lot of people treat it as such.
Irrelevant appeal to populism.
Daniel Kuehn: re: "How do you calculate efficiency globally?" Who said you can?
Isn't your position that we can calculate efficiency objectively?
re: "Irrelevant appeal to populism."
No, liberty student. It's not an irrelevant appeal to populism. It is a critique of libertarianism as it is widely understood and presented. If this is not your libertarianism then (1.) all the better for you, and (2.) you should JOIN ME in leveling this critique.
My point is not to spring a "gotcha" on libertarianism, liberty student. My point is to identify a tendency I think is problematic.
re: "Isn't your position that we can calculate efficiency objectively?"
Of course not.
Daniel Kuehn: What I'm getting at is that a lot of libertarianism is simply a ratification of what we know about market efficiency. My point here is that (1.) what we know about market efficiency is very complicated, and (2.) a solid libertarianism ought to justify its ethics on its own, regardless of the positive claims of economics which are much more complicated than they are often presented.
What I'm getting at is that a lot of libertarianism is simply a ratification of what we know about market efficiency. My point here is that (1.) what we know about market efficiency is very complicated, and (2.) a solid libertarianism ought to justify its ethics on its own, regardless of the positive claims of economics which are much more complicated than they are often presented.
To make libertarianism about morals is to put the cart before the horse. Rather than advocating for market order because it produces material wellbeing (efficiency), such a backwards approach simply applies the label "libertarian" to whatever aspects of the market seem to produce material wellbeing. As such a moralizing libertarian theorist gains more information about market processes and other natural orders, he or she revises the theory and proceeds to call that libertarianism. The alternative to this pointless game of No True Scotsman is to realize that the market knows best, and simply get out of its way.
Why anarchy fails