Economics Questions

Re: The theory of interventionism in light of economic experience

maxpot46 — Tue, 02 Feb 2010 05:53:32 GMT

Leviathan:
The workmen desire to get as much, the master to give as little as possible...It is not difficult to foresee which of the two parties must force the other into a compliance with their terms. -Adam Smith

Fascinating discussion... just wanted to make a comment about this Adam Smith quote. Namely that it's incorrect (assuming Smith means that the master will force the worker to his terms). I've never let a "master" dictate compliance to me. In the last 20 years I've been a worker, and I've quit quite a few jobs when it became apparent that my employer thought himself my "master". I know what I'm worth and have never hesitated to tell a "master" to shove it. I've always gotten another (often better) job a few days later.

Now, I'm an entrepreneur, being tired of having idiots tell me what to do. In retrospect, I find it interesting how so many Austrians (myself included) venerate entrepreneurs but don't consider becoming one. When I was at Mises U. 2005 I was struck by the fact that just about everyone I talked to wanted to be a professor. No one wanted to become a politician or an entrepreneur. Funny, because as much as we say that ideas change the world, it's actually action taken on ideas that do so, and for us Austrians that would require at least some of us to enter politics and/or business.

Re: The theory of interventionism in light of economic experience

Leviathan — Tue, 02 Feb 2010 05:18:45 GMT

Chris:
Perhaps you can go violently threaten a rehab center to admit me because I think I have a right to their services. Just tell them it's for the greater good and to be happy that they live in a "libertarian" society.

That was lame, dude. Like...Mind of Mencia lame.

Re: The theory of interventionism in light of economic experience

DanielMuff — Tue, 02 Feb 2010 05:16:40 GMT

Everyone, keep it clean.

Re: The theory of interventionism in light of economic experience

Chris — Tue, 02 Feb 2010 05:15:20 GMT

Leviathan:
Chris:
I always get a kick
I can tell. They're doing wondrous things in rehab programs these days.

Perhaps you can go violently threaten a rehab center to admit me because I think I have a right to their services. Just tell them it's for the greater good and to be happy that they live in a "libertarian" society.

Re: The theory of interventionism in light of economic experience

Leviathan — Tue, 02 Feb 2010 05:10:10 GMT

Chris:
I always get a kick

I can tell. They're doing wondrous things in rehab programs these days.

Re: The theory of interventionism in light of economic experience

thelion — Tue, 02 Feb 2010 05:07:55 GMT

Agree with Chris.

But anyway, this discussion has wandered into the forest somewhat, instead of viewing it from the hilltop.

Mises never made any predictions of temporal progression from middle-of-the-road to socialism.

Views on intervention, more or less, and the opinions of the various scholars of the Subjectivist-Marginalist Tradition are not about this issue.

Mises simply said, quite formally: if the price control is above the equilibrium to which the controlled product would otherwise tend to, there is a shortage.

If the shortage is the opposite of what was wanted (e.g. more milk, not less), then the factors of production of milk must also be fixed with price controls. And the factors of those factors must also be fixed with price controls. And so on; each step causing a shortage, requiring either admitting the shortage or further price controls.

If the process has not led to socialism, it means that the government stopped at some point and admitted the shortage. That does not mean it renounced price controls. It simply means it has paused and remains satisfied in some way politically with the shortage. No more; no less.

Re: The theory of interventionism in light of economic experience

Chris — Tue, 02 Feb 2010 04:36:34 GMT

Leviathan:
Why bother, when statism finds such endorsement from "libertarian" scholars while legitimate libertarian socialists expressed only opposition to the political situations in "Soviet" Russia and "Communist" China?

I always get a kick out of it when anybody tries to present socialism as a freedom-oriented ideology. Taking away the freedom of individuals to make decisions is definitely libertarian! Wow, after a group of people forces me at gun point to surrender what I produce by my own capabilities because they arbitrarily believe that somebody else has a right to it, then I'm free to live as I please. You should do stand-up comedy, Leviathan. You really are that hilarious.

Re: The theory of interventionism in light of economic experience

Jon Irenicus — Tue, 02 Feb 2010 01:12:31 GMT

Actually he is right. Some Austrians like Reisman (mainly due to inconsistent Objectivist views) do fall into the trap of so-called vulgar libertarianism, but the more consistent of us condemn all statism alike. Hayek was never Mr Libertarian, so he is a poor example to use. He was, however, a brilliant economist amongst other things (as is Reisman.)

Re: The theory of interventionism in light of economic experience

Leviathan — Mon, 01 Feb 2010 22:41:18 GMT

Daniel Muffinburg:
Leviathan, stop meshing all Austrians into one being. I doubt there are any Austrians that completely agree with all the other Austrians. Please stop making straw mans or taking someone's argument to be that of another.

It is an economic school associated with a political ideology characterized by homogeneity far more than heterogeneity. There is some disagreement. There is not substantial disagreement to any extent that rivals that of any major political or economic school. Even a non-Austrian like Friedman is closely allied with the likes of Hayek in the support of Pinochet and Thatcher because of a shared political philosophy built upon the same moral foundations.

Daniel Muffinburg:
I'm sure you find it fallacious when someone here calls you a socialist.

Not particularly.

Daniel Muffinburg:
Also, I'll take post-Lincoln-till-1913 USA if you take Soviet Russia or Communist China as real-world examples of the massive manifestation of our respective ideologies.

Why bother, when statism finds such endorsement from "libertarian" scholars while legitimate libertarian socialists expressed only opposition to the political situations in "Soviet" Russia and "Communist" China?

Re: The theory of interventionism in light of economic experience

DanielMuff — Mon, 01 Feb 2010 21:53:03 GMT

Leviathan, stop meshing all Austrians into one being. I doubt there are any Austrians that completely agree with all the other Austrians. Please stop making straw mans or taking someone's argument to be that of another. I'm sure you find it fallacious when someone here calls you a socialist.

Also, I'll take post-Lincoln-till-1913 USA if you take Soviet Russia or Communist China as real-world examples of the massive manifestation of our respective ideologies.

Re: The theory of interventionism in light of economic experience

Leviathan — Mon, 01 Feb 2010 21:14:57 GMT

Jonathan M. F. Catalán:
You could be accused of doing the same thing. This is the weakness of responding to arguments by calling out logical fallacies; you should make the case, not state it.

I could, but not with any very sound basis. I've always found it extremely ironic that the same economic rightists who would accuse socialists (mainly socialists that were libertarians and anarchists) of committing no-true Scotsman fallacies in denying the legitimacy of authoritarian "socialism" would insist that we lack true conservatism/capitalism, etc. Now you've progressed beyond that somewhat; your insinuation is that we "cancel each other out." The fact is, however, that a substantial amount of self-described socialists condemned authoritarian "socialism" from the period of its initial emergence throughout its dominance in the USSR and its satellite states. Conversely, implementation of economically rightist policies most closely associated with "laissez-faire" principles have a record of engineering economic recession. Have a look at John Ranelagh's Thatcher's People:

[A colleague in 1975] prepared a paper arguing that the "middle way" was the pragmatic path for the Conservative Party to take, avoiding the extremes of Left and Right. Before he had finished speaking to his paper, the new party leader [Margaret Thatcher] reached into her briefcase and pulled out a book. It was Friedrich von Hayek's The Constitution of Liberty. Interrupting our pragmatist, she held up the book for all of us to see. "This," she said sternly, "is what we believe," and banged Hayek down on the table.

We don't even need to look to Hayek or the more distant Friedman to witness examples of economically "libertarian" rightists rubbing shoulders with Pinochet when we can look to George Reisman's eager endorsement of his policies on this very website.

Jon Irenicus:
So heavily interventionist capitalism should not be called state capitalism and should be conflated with what Austrians argue for... because? Pfft.

You misunderstand. I identify the nature of "vulgar libertarianism" as Kevin Carson does. Austrian economics specifically poses no threat in terms of its "ideal" economic principles because their fanciful utopianism prevents their implementation. What is harmful is that adherents of the school shift from an ideological defense of the "free market" to a defense of actually existing capitalism, despite its basis in state intervention. An example is found in another Pinochet post from the aforementioned Reisman.

Even if a socialist government were democratically elected, its first act in office in implementing socialism would have to be an act of enormous violence, namely, the forcible expropriation of the means of production. The democratic election of a socialist government would not change the fact that the seizure of property against the will of its owners is an act of force. A forcible expropriation of property based on a democratic vote is about as peaceful as a lynching based on a democratic vote. It is a cardinal violation of individual rights.

This is a defense of the ethical legitimacy of the wealth and resource distribution generated not by his utopian "free market" capitalism, which is and will remain perpetually nonexistent, but that generated by actually existing capitalism, which involves substantial state intervention as a means of maintaining stability and has generated property distribution based on NAP-violating force or fraud, since all property was actually directly acquired through force or fraud at some point in time or was created by other resources acquired through force or fraud at some point in time. If he were consistent, he would need to support extreme redistribution.

Re: The theory of interventionism in light of economic experience

Esuric — Thu, 28 Jan 2010 04:42:37 GMT

Look around you.

Re: The theory of interventionism in light of economic experience

Jon Irenicus — Thu, 28 Jan 2010 04:13:48 GMT

The reason for the rejection of the Austrian association of "capitalism" with "laissez-faire free markets" and dubious application of the terms "corporatism" or "state capitalism" to present conditions is because of its function as a no-true Scotsman fallacy intended to dismiss the failings of capitalism.

So heavily interventionist capitalism should not be called state capitalism and should be conflated with what Austrians argue for... because? Pfft.

Re: The theory of interventionism in light of economic experience

Austro-Devil — Wed, 27 Jan 2010 22:59:26 GMT

Fair enough DD5. But are saying then that big business always loses from regulation in the long run? Even though big business tends to be the an important force demanding regulation?

I reckon either good be the case.

Re: The theory of interventionism in light of economic experience

DD5 — Wed, 27 Jan 2010 21:46:20 GMT

Austro-Devil:
So Government Motors and plenty of banks get lots of favours, but I don't see this as hastening central planning.

When profits of corporations become more and more dependent on political favors, then by the nature of things, these corporations become accountable to the government and not consumers. The person that provides (or secures) the revenues for the firm determines what the corporation should produce, how much, and at what quality.

Command and control regulations are substituted for consumer sovereignty. Private property is meaningless if the owner does not have control over his property. Since government regulations effectively transfer control from private owners to government bureaucrats, there is also a transfer of ownership. What you are failing to realize is that these regulations serve as a means to confiscate private property and to hand it over to government officials.

Austro-Devil:
In fascist corporatism, once fascists had seized power they were in control. But now the president is always thinking about the next election - he is more constrained in his attempts to control big business. So I don't think this crisis moves us toward anything like socialism.

And as explained above, control over production is gradually transferred from entraranuers to the government. Consumers gradually loose control over production as more and more of production is directed by a beuracracy. Example; the current health care system and the proposed reforms, which only takes this process further. another example is the banking industry. And you will be surprised, but our entire economy is now infected with this.

Fascism is socialism in the guise of Capitalism, as Mises use to say. There is no difference.