2 interesting objections I've never heard before

The Texas Trigger posted on Thu, Aug 23 2012 8:27 PM

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I have told you all about my Polish friend who is slowly coming around to austro-libertarianism. He is probably the most caring and skeptical (yet open-minded and unstubborn) person I have ever met, however he was originally a Marxist when I met him. He has, ever since I have known him, admitted that the kind of communism he lived under in his youth in Poland was a terrible thing, and it is for this reason I believe I have been able to get where I have with him so far. However, he at first believed, like many, that Marx's ideas just weren't executed properly. I have moved him from this position to a more moderate one.

After about 2 years of knowing him, living with him and his wife, making music with him (he is a producer, I am a writer and a studio owner), and being basically best friends with the guy, I believe I have brought him to a serious turning point in his political ideology, and his conversion could be right around the corner. This is a wonderful thing, but because he is teetering on the precipice of a complete 180 degree stance from when I met him, I want to do this just right. I cannot fuck this up.

So, I am consulting the forum for tips, advice, and suggestions. I have an extreme respect for anyone who is willing to forego his ego, and turn his back on his previous beliefs when truth exposes them wrong. I especially respect someone like this guy when the new ideology confronting him contrasts so greatly with his original convictions.

I know this is extremily long (some of it unnecessary), but I tytped it all out and it is what it is. Here is where we are at, and I think that some of the questions that he poses are unique to what we normally get, and thus will require very good answers for him to fully commit to Austro-libertarianism. Perhaps you have heard these before. I have not. I think I know how to answer them, but given the situation, I want to be prepared, and get all of the responses I can so I can tailor them to my friend. Here is the conversation, pretty much verbatim since I recorded it.

This one came after talking about liberal-arts universities and how I believe they function contrary to the division of labor. They try to make us well-rounded instead of specialized. His question does not attempt to poke holes in the DOL's points on efficiency, but rather leads him to believe that a libertarian society would be full of dole, robotic people. In this sense, he attacks free-markets and libertarianism from a preferential standpoint. He says, "After having met you, you have changed my mind on much of what I believe. That said, I like the idea of being well-rounded."

To this I replied "In the free-market, no one can legally stop you from this pursuit. Perhaps I should re-preface by going back to compulsory lower education. These function in a similar way to liberal-arts schools in that they tell us we must know X about math, Y about literature and art, and Z about Home-economics. Certainly it is nice to be able to both read and decipher which angle in a triangle is the most obtuse or acute, but the most successful people and economies tend to be highly specialized and diversified. If you have throat cancer, do you really care how good your cancer doctor is at golf? Probably not. There is nothing wrong with pursuing interests like the study of cancer and golf at the same time. My problem is when the state tells me I must practice my golf swing and study cancer. This is both wrong and inefficient."

His reply: "I accept that it may be wrong. I am also willing to accept that, in a monetary sense, it may also be inefficient. My worry is that you will be right. I worry that the stateless society will produce an economy that will incentivize all of us to become highly specialized; so much so that when I meet someone who doesn't do exactly what I do, we will have very little in common. I read some of de Soto, as you recommended. He wrote something about how knowledge of a skill will become more and more narrow as the population increases. If this is true, then according to you, it would be ideal for this to continue more and more as time went on. Without falling pray to the nirvana fallacy you have told me about, I wonder if it would ever be realistic that skills become so specialized that as far as a career is concerned, we would be incapable of really explaining what we do or even communicating it at all to anyone who didn't do it also, because the lingo would become so deep and the skill would be too specialized for anyone else to 'get it'. I agree that this would probably create insane wealth, and it may even be more moral than what we live in now, but would the world not become vey dull if one were incapable of relating to another?"

I told him, "Would you not still be able to relate to someone on subjects outside of work, just as we are doing right now; talking about politics and philosophy? Would you not be able to talk about your family with another person, your interests, what you love, food, history, culture, etc...?"

Him: "Family perhaps. This topic does bore me, though. As for the other topics: if we become so specialized, why would I take the time to learn about these things? Wouldn't knowing anything about them prove my point? Wouldn't taking the time to learn about philosophy, culture, and religion be antithetical to specialization unless it was your job to know them? You yourself are a walking antithesis to your own argument because your profession does not require that you gain knowledge of politics, history, or philosophy."

Me: "You are somewhat right. I do not NEED to know these things, but I do for three reasons.

First, they do pertain to me because I write songs. As you know, my songs are often political in nature. As an artist yourself, you should know that the caft of songwriting, and most art for that matter, is often introspective and extremely philosophical. I believe the study of these things makes me a better writer. But you are right that for most people, the study of these things has very little to do for their occupation, at least in a direct sense. However there are other reasons everyone should study law and economics and I’ll address that in my third point.

Second, I ENJOY them. It is in the free-market only where I truly have the right to pursue whatever INTERESTS I have, be they monetary or leisure in nature. If I am a consumer in a free market, I vote with my time and my dollars what resources should be directed where. However, the existence of the state in any sector of the market can only pervert this ‘voting’ process, thus misallocating resources. This is, in my opinion, the greatest proof of why the state can only bring about terror and destruction of wealth and life.”

Him: I will let you go on, just remind me to ask another question about that point.”

Me: “Ok, I will. The third reason I study these things is the same reason that I think everyone should study them and this will tie the first and second reason together. Because we live in a society with a state that creates regulatory laws, fiscal policies of intervention, arbitrary moral standards and wars with peaceful foreigners, it is, in my opinion, even more imperative that we understand law, philosophy, and economic theory, especially Austrian, Praxeological economic theory. Doing so will undermine the authority and power of the state; a goal you know I want to work toward.

But these studies aren’t simply for smashing the state. Understanding one’s country’s economic system and law (ours being American economics and law) is crucial to survival. We must know what we can get away with and what we cannot. We must know our ‘rights’, even if they are considered more of a privilege granted to us by the state than they are inherent and endowed to man at birth. From both of these perspectives (moral and survival), I think that if the state were smashed, there would be much less need to understand either law or economics, except maybe to prevent a state from forming. Even Rothbard does not claim that it is wrong for a man to be ignorant of economics; only that he not spout opinions about them in his ignorance.”

Him: “Ok, that all may be true and I agree with most of that, but doesn’t your last point mirror my fear; that without the state, we will become so specialized that we will have nothing in common, other than perhaps family? I am not saying this assertion alone would be a good justification for the state to exist; I don’t think it is enough. However, do you think I am I right in my one fear?”

Me: “haha, well, I don’t know what the market will hold for us. No man can. If he could, he might as well be the dictator. I do not think it will be that extreme because few men seek only one interest.”

Him: “But doesn’t this prove my point? That full division of labor is not really a good thing, or ather it isn’t really possible?”

Me: “I suppose, in some sense, you are right. But can you name anything in this world that is purely anything?”

Him: “Well, perhaps it is not realistic to believe that the world, or even a nation, will or can ever be ‘purely’ anarcho-capitalist.”

I was at a loss for words. What a round about way of getting there. I commended him for this one.

Next he asked: “Back to my other question that I wanted to ask you. I know you probably don’t support The National Endowment for the Arts. Most countries, including Poland, have programs like this. Sure, they often fund what I consider to be terrible art, but I also think they keep legitimate art alive, and the market would banish it through its allocation process. I am so conflicted on this issue after meeting you because two years ago I would have been all for it.

Me: “Yeah, I think it’s utter rubbish and ultimately thievery.”

Him: “I get all that, and after meeting you, I do believe that taxes in any form is thievery. But as a composer and someone who loves classical music, I worry that without programs like this, that art form, in particular, would disappear. We may always have the recordings but you have been to a real symphony; you know what it is really like to listen to Beethoven’s 5^th symphony, especially in the Vienna Musikverein. I know that these symphonies run at a loss, and would not exist were it not for state funding that keeps these things going. Perhaps I am just being selfish. I just think these things make society smarter, more cultured, and just better. I think that is worth what we pay.”

Me: “Hey, don’t get me wrong. I would hate to see these things go away. I would really hate to see that hall turn into something really commercial; something that lacks what I deem to be tasteful. But what is life but a series of choices, sometimes none of them being good, at least in one’s opinion. What I would hate even more than seeing these things disappear would be seeing armed men force other men to hand over their hard-earned money to fund something that these people do not want.

You could be right. In a free market, it is possible that these things you love could go away, and for no other reason than a lack of demand. That may sound cold, but we must remember what exactly demand is: the aggregate vote of time and money from consumers as to where resources and skills should be invested.

As an artist, I think that you would at least admit that what constitutes good art is a highly subjective question, and perhaps the only thing with a more subjective definition than ‘good art’ would be the definition of ‘art’ itself. Certainly, though, we all hold our own standards on what we deem to be ‘art’ and ‘good art’. Some of us believe that anything can be ‘art’, but, at the same time, we believe not all ‘art’ is ‘good’. Others believe that anything can be ‘art’, and since art cannot be universally defined (or at least we cannot all agree on a universal definition), no art is either ‘good’ or ‘bad’. It simply ‘is’, and all are free to like or dislike what they will. But, in the latter person’s perspective, no one can rightfully assert that something is not art, especially if someone else claims that it is.

Interestingly, which of these perspectives you hold is irrelevant. All that matters is that you understand that human beings will have conflicts. Sometimes these conflicts can be negotiated or resolved, and sometimes they can’t. Art, I’m afraid, is one such conflict that will never be universally agreed upon, albeit usually peacefully. Even if you believe you know the true definition of what ‘art’ is, there will be a million or more who disagree with you.

I take comfort in these particular instances of human disagreement, though.”

Him: “Wait, ok, so why do you like them?”

Me: Well, It really speaks to each of our uniqueness. It is the reason we have so much choice in the world. And don’t just limit yourself to art as it is commonly understood, like music and painting. Think of it as all human endeavors, like, say, the building of a vehicle. Preference in this painting over that one is really just a manifestation of our preferences in general; of this woman’s looks over that one’s, of this cars features and price over another’s. Imagine if we had one definition of what the perfect car is. If we could all agree on that definition, that might be nice, but the reality is that we won’t. If I had to choose between having AC or heating in my car, I would probably choose AC because you an I live in a town that is usually warmer than cooler, and I hate being hot more than I hate being cold. Would I like to have both? Sure, but I might not have the means to get both.”

Him: “Wouldn’t the perfect car then be one with both?”           

Me: “Not if you hate having cold or hot air blown in your face. But even if you did want both, again, another unfortunate fact of reality is that we live in a world of scarcity. There is only so much to go around. How do we continue to keep from running out? We don’t really. We just reallocate the finite resources we have, or we discover new uses for resources that we initially deemed to be useless.

A perfect example would be crude oil. There was this guy a while back who refined fossil oil for use in kerosene lamps and other such products. He loved profits and hated waste. One such waste product he and other refiners had to deal with was a by-product called crude; a ‘useless’ goop that was leftover after he had refined the fossil oil into kerosene. Now, the reason he hated waste should be obvious: for one, he had essentially paid for the crude because it was part of the fossil oil. To make matters worst, he had to pay again to have someone dispose of the stuff, which only added to his expenses. For a man who loved profits, this waste was a real pain in the neck because, contrary to popular belief, an entrepreneur does not take profits ‘off the top’, as is commonly stated; rather profits are the money left over after expenses are deducted.

So, he had two options: continue to pay someone to dispose of something he had, essentially, already paid good money for, or figure out a use for it. Well, after a little experimentation, this man found out that this crude oil is pretty useful stuff. Not only that; it actually burns cleaner and more efficiently than kerosene, and because of its status coupled with its efficiency, it was much cheaper to produce. This meant that lighting up one’s home at night was going to get a lot less expensive, and this particular innovation meant that everyone who used it would also get wealthier; not just because of the decreased cost of lighting, but also because crude oil now made it economical to work at night, increasing hours of production, which in turn increased total output of national production. And, whenever there is more production then, Ceteris Paribas, wealth is created.

Now, perhaps the most insane part of this story is the irony of it all. Up until this guy figured out how useful crude was, the entire economy was satisfied to use other less efficient forms of power, and its only chief concern with this power was how to get rid of the crude! Now, what is one of the primary concerns among both the consuming public as well as environmentalists who hate the stuff?”

Him: “That we will run out?” 

Me: “Yes! Isn’t that hilarious? Isn’t it interesting how ironically juxtaposed these concerns are with each other, and that it wasn’t that long ago that we were more concerned with getting rid of the stuff than running out of it? What a baseless fear both of these end up being! If we run out, the market will find an alternative, but also we hear all the time that we will run out of oil in 50 years or 100, yet these always end up being wrong, way wrong! Why? Because those estimates are always based on current consumption. The logic is that we have a finite resource, like crude oil, and that resource is slowly running out. This is true. At the same time, our demand for crude might at first appear to be rising because, well, obviously we have way more vehicles in use than we did back when crude was first discovered to be useful.

Him: “So what is wrong with that logic?”

Me: “Well, if it weren’t enough, these assertions have been proven wrong empirically, and not just once, but dozens of times. The reason why is that these estimates do not, and really cannot, take into account how the market and the desire for profit and to eliminate waste (as evidenced by our story) results in ever more innovative engineering of the products that use the crude oil. If you want a good example of this happening all the time, just watch car advertisements. We see on a near weekly basis that this car gets 10 more miles to the gallon than the previous one. It’s not just the fuel that gets more efficient; it’s also the machines that use the fuel.

Now, that was a diatribe I know, so lets get back to national endowment for the arts. I say all of this about how we define art, which brought us to defining the perfect anything, and how we allocate resources, blah, blah, blah. But what does it all mean. It all seems like a separate subject but it really isn’t. I say all of that to make point: that individuals, and only individuals, can properly allocate resources to their most efficient uses. This is performed through consumer demand, displayed through the free-pricing system. This does not mean that you or I will always like how resources are distributed, but we can be sure that, on the whole, they will be distributed justly and efficiently. However, when we let the government allocate resources, this just allocation is perverted. The NEA is just one face of government intervention in this process. Even worst, how can anyone say that we should let the government define what is good or bad art? In the first place, to allow the American state to do so violates the first amendment to the constitution. By usurping funds from one person and giving it to another, you make the fist person financially less capable of expressing his free speech, even if it may be an implicit speech through the use of voting with his dollars. You have silenced the first person’s ability to free speech to the same degree that you have amplified the speech of the fund’s recipient.

But even if we ignore that, can we really be sure that the government knows what is good art? Aren’t we really just saying that good art comes from those who have skill in filling out government grant requests better than other “artists”? Is this really a great metric of fine art? I don’t think it is.    

Also, I don’t think that it is entirely clear that these symphonies would go away, should the state programs that fund them cease to do so. Many often like to verbally lynch and villainize the wealthy in this country, but who is it that usually ends up funding these symphony halls absent state grants? You will find that it is usually the wealthy. And, just to be clear, tell me if I understanding your question correctly. It seems you are worried that, absent the state, we will be unable to keep these symphonies running at the same professional level of respectability that we are now. If public demand for these orchestras is not high enough, then these great cooperations of human skill and beauty will vanish if the state does not swoop in and save them, right? I think this assertion is wrong.

Could it be that perhaps the taxes exacted from the citizenry resulted in its inability to give charitably to institutions like these? Perhaps demand would have been high enough had they been able to retain the money they lost in taxes, but maybe not. That said, I think it far more likely that the wealthy guy who, even after taxes, still had the funds to save an institution like the orchestra that he cared about, may be less willing to do so, thinking, “I have no obligation to save this thing. After all, we have the NEA to keep things like this going.” Who could blame him. Isn’t it the job of the NEA to breath monetary life into such ailing ventures?”

Him: “I suppose it is possible. There’s just no guarantee with charity. It is totally voluntary. Under your system, these things could just die.”

Me: “What guarantee is there that they won’t die even with the states help?”

Him: “Well, they haven’t yet.”

Me: “Ok, lets assume that the government can 100% guarantee that won’t happen. Is the culture really any smarter or more refined because of it? You can make the public pay for these things, but you cannot make the public like them. You can’t even make them attend. Or are you in favor of writing a law that forces attendance? Are you in favor of writing a law that makes everyone swear that they love the orchestra. Even if you could enact the latter, would it really mean they love the orchestra? A famous singer once wrote, “Love made at gun point isn’t love at all.”

My point is, the NEA does not keep any art alive any more than medical machines kept Terry Schiavo alive; you are just delaying the inevitable. The market will find a way, which is just another way of saying that human wants and needs will find a way. Better to let it work than to try and fight it.”

Him: “I still just can’t leave something like this up to the wealthy, much less the underprivileged. That is a huge leap of faith to rely on greedy men to take care of those who cannot care for themselves. It is not like the wealthy have shown a great track ecord as of late, especially given our economy.”

Me: “But you would leave these responsibilities up to the government; an institution that has shown throughout its existence, without exception, its tendency to starve people, take from them without asking, force them into wars that kill them, and all the while kill other’s who had even less involvement? But that is only empirical evidence. What of the logic of it? Are we really to trust an institution whose entire existence is predicated on one activity alone: theft? It cannot exist without taking from you, and if you resist, it will kill or imprison you.”

Him: “That is true. I want to accept this stuff, it’s just very difficult to envision a world without it. How certain things would get done.”       

Me: “Hey, I’ve been there. It is not an over-night process. As for the rich, what about the crude oil story?

And, hey, depending on which wealthy person we are talking about, this villainization may be warranted; such as in the case of a lot of these wall street guys who get in bed with the government, like Mitt Romney, and make serious bank because of it. But, as with any generalization one can make (like saying things like ‘the rich are greedy and evil’, or ‘the poor are lazy’), there are always exceptions, and sometimes these assertions are not even mostly true. Also, sometimes these assertions just over-simplify an issue.

If you’ll bear with me for a second, I’ll give you an example of such a simplification. In the case of Wall Street, I think many of these guys up top were greedy. In fact, I know they were because we all are. Greed alone, in my opinion, is not enough to ruin an economy; on the contrary, it is what makes an economy great, because greed is just a euphemism for motivated self-interest. To assert that it is because of man’s greed that economies fall into crisis is simply not enough; if this were so, why are we not in perpetual crisis?

But, I also think it would be ignorant and foolish to deny that men are greedy. Even the briefest of extrospection or introspection should, I think, lead one to the conclusion that all men are, undoubtedly, greedy/self-interested by their very nature. They always have been, and, with any luck, they always will be. Therefore the existence of any universally shared human characteristic, such as ‘greed’, is neither relevant nor explanatory of the common ebb-and-flow of economic crises and, specifically, the business cycle. Know why? Guess who the guy was that discovered the crude we talked about?”

Him: “I have no idea.”

Me: “none other than John D. Rockefeller, THE poster child for robber barons, and the man whom many believe to personify capitalism. The man people fear capitalism will produce. I certainly hope it will. Can we really say he is anything other than a benefactor to society? Can we really say did not vastly improve the lifestyle and wealth of everyone who used his products, or even of those who purchased from those who used his products? Why is a man like this viewed with such scorn? He was a modern day Prometheus; he literally brought light to everybody. Who cares if he did so with the intention of making profits? Greed and profit-seeking are why we moved from the dark age, and it is because of men like Rockefeller and the achievements of men like him that we Austrians say that when one man grows wealthier, he has increased the wealth of everyone around him. Wealth is contagious. Poverty, and its prevalence, is not the normal condition of man. Poverty is a curable disease, but that cure will never be government. Here is why.       

We talked about the financial crisis and we often wonder what explains it. I have just kind of told you a common explanation and why it doesn’t hold water. What does explain financial crises and the business cycle, as well as many other problems in the world, is this strange phenomena where one man is granted the ‘right’ to control another man’s property, regardless of the second man’s disapproval or objection to the first man’s supposed right. This is especially egregious when the first man is granted this ‘right’ for no other reason than the fact that he knows a few guys possessing pens with the power to govern everyone else through laws written down arbitrarily. 

Of course, there is only one entity with the power to grant these supposed ‘rights’. Do you know what entity that is?

Him: “haha, I bet you will say the state”?

Me: “exactly! And I can think of no better example of this arrangement taking place than at the onset of the cisis we ae living in now. Our government set in place policies that incentivized the practice of certain counter-productive financial activities; for example: ignoring traditional, sound, lending standards based on a borrowers credit and also not requiring down payments on the sum borrowed.  

Can it really be argued that a self-interested, profit-seeking bank would suddenly become so charitable and careless as to lackadaisically abandon all of the sound practices that would make such a venture a profitable one in the fist place? And we aren’t talking about just one bank, but all of them. Unless one is willing to admit that all of these guys were actually just really nice, charitable, selfless guys (which I have yet to hear anyone in this country assert), then you have to admit that something else was probably going on; there was either a better way to make a profit, or…the rules of the game changed, and there was now a different method one had to employ to stay in the game at all. I think the evidence is clear that the latter is the case.

So, I don’t think we can blame every Wall Street guy who got rich while exacerbating the problem by lending out money to people with bad credit. This is because even if this lender knew (as many did) that these practices would lead to his firm’s eventual financial ruin, he would probably still have participated because HE PROBABLY HAD TO. Under the circumstances, for him not to have participated probably meant one of two things: either his firm would have been unable to compete, thus end up bankrupt/bought out, or, most likely, he knew that if/when his firm did go sour from the new lending practices, then the policies put in place by our government would socialize any losses through a bailout, and in the mean time, all profits would still be privatized. However, this bailout was only granted given that his firm promised to loosen up its lending practices.

So, to not have participated in the scheme meant you would lose your job or your firm would go bankrupt or a bank that did practice these new standards would buy up your firm. If, however, you did participate, you got to keep your job, make lots of money, feed your family, and in the highly likely chance that shit did end up hitting the fan, you were relatively assured that your firm, and thus you and your career, would be largely immune from the negative effects. And this is exactly what happened.

So, you see, things aren’t that black and white. What is always the case is the state’s incentivizing human beings to act in manners that are counterproductive and against the majority’s well-being.”

His second question basically started with him admitting that an Ancap society would be better. He called himself a “realist” though, saying:

“I think you are right about all of this, except for one thing. While life may be better for everybody in a capitalist anarchy, this goal will probably never be achieved. Because of this belief, it seems like certain regulations are needed to counteract the negative effects of other regulations.”

Basically he meant that, for instance, Medical care in the AnCap society might be better, but because we do not live in a society like that, but rather one with a vast array of laws and regulations, he would prefer socialized medicine to the current system, claiming that at least it would get rid of this “insurance through work” problem, and his best example was: “The AMA is certainly evil. I know they limit supply which increases costs. But, at least in a socialized system, these doctors wouldn’t see the profits they do now. This might help alleviate the problem.”

Obviously, there is a lot for him to learn here and I did my best to share it with him. But I do see his point, even if I disagree with it. Other then informing him of the facts about socialized medicine, I had to agree that our current system sucks. I could not convince him, however, that it is better than a socialized system would be.

Lets have it…