Economics Questions

Re: Anarchy Revisited (WARNING: long post ahead)

liberty student — Fri, 03 Dec 2010 22:59:30 GMT

Great post CR.

Re: Anarchy Revisited (WARNING: long post ahead)

CountRumford — Fri, 21 May 2010 11:53:46 GMT

I watched "Bury My Heart at Wounded Knee" recently and so I've been thinking about this. The Native Americans were practically stateless, so why did they get so easily steamrolled by US settlers?

The answer has to do with their society's intense cultural pressure to keep things as they are forever. They live in the ~~present~~ past. As someone earlier in the thread said: it's their time preference. They don't store capital. They don't even try.

In "Bury My Heart at Wounded Knee," I know the film maker was trying to get me to sympathize with Red Cloud, Sitting Bull and Crazy Horse. Instead I sympathized with those poor souls who saw a better future with the White Man and risked the hatred of everyone they knew in order to have it. To me, those Native American leaders looked like stubborn children who preferred a life of abject poverty just because that's the way they had always lived.

I would say those tribal societies get rolled by states so often because having a state with some laws enshrining private property is superior to no state and no private property.

Property first, and all else follows!

Re: Anarchy Revisited (WARNING: long post ahead)

Merlin — Wed, 07 Apr 2010 14:32:05 GMT

Curius Dentatus:
I think you are down playing the violence that has occurred between tribes in Africa. Africa was not an exception to human flaws. The hatred (racism) between tribes ran deep (funny how the same happened in Europe Danes, Normans, Celts, Irish ,Welsh, Lapps etc,etc) to the point of genocide and slavery.

I’m not saying that violence is lacking in tribal societies, and I’m certainly not ready to bet that of such societies at large. My observation stems from the now non-existent Northern Albanian Tribes. I haven’t’ had time to generalize by studying tribes in general.

As for inter-tribal wars, where those happened, I cannot believe that the result ever came close to ‘genocide’. As a testament of that, note that in Africa, by far the continent which has knows less state-like formation, there are literally thousands of live languages, and individual tribes have unique languages.

Contrast that with Europe where, due to real displacement and genocide, the list of active languages is now well under a hundred. Inter-tribe wars were far less damaging, indeed far less ‘war-like’ and more akin to boys brawls, than what us European stocks know as War with capital W. Internal violence, I believe, was even less pronounced. But again, I cannot claim references here.

As for slavery being proof of a violent society, note that slavery cannot stem form war and conquest. Does anyone rally believe that a single white family, armed with, at most, a musket per head, can hold down tens if not hundreds of superbly physically fit slaves. Slavery is not violent in origin, its economic. War has nothing at all to do with it, I’m afraid.

Curius Dentatus:
I still beg to differ about the formation of the state brings prosperity. The state forms when wealth appears not vice versa!

I agree up to a point. Now, it sis certainly true that in a society where all present resources are being used to the maximum, and still the division of labor has not emerged, States are economically impossible: if no one can make a living as a full-time butcher, no one can make a living as a full-time robber.

Thus, you are right, that if a society does not accumulate some level of wealth, which allows for some spare time, possibility of savings or any other potentially untapped resource at all, than States are impossible.

But what happens when a society has achieved the knowledge of investment (in agriculture), the division of labor and has lots of spare time, and still refuses to improve its well-being? If human preferences tend to be satisfied at subsidence, it is clear that no more prosperity will come form a free society. If we add a breaking point differential in the equation (some guys want more, some don’t) the tendency to use violence to reap the unused resources presents itself. If we take that differential away (everyone want more) violence again becomes unfeasible. So, wealth does precede states to a point, after which states drive wealth to a point, after which wealth drives itself. That’s the basic idea.

Curius Dentatus:
Please explain to me in this pre-colonial map of Africa the reason why there is barely any kingdoms in this prosperous country if the state appears before wealth.

The only prosperous parts of Africa have historically been the Nile valley and, perhaps, northern African in general. And those parts have given birth to some pretty powerful states as ancient Egypt and the Muslim Caliphate. Of the rest of Africa, only Ethiopia is shown, in the great article you linked, as having some degree of what we would call civilization. But Ethiopia has always been a state.

Thus, let us take a look at the map you bring about: we have vast tracts of land, blessed with a powerful people, rich resources and a decent coastline as well as great rivers (for trade) and, above all, in a situation of statelessness for centuries. What should orthodoxy commend? That those parts be the most advanced by now. The opposite happened in fact.

On a lighter side Hoppe gives a very interesting account of the very same historical facts I use for this theory. He uses an other model, which seems logical and consistent. I’ll have to give it much thought.

Re: Anarchy Revisited (WARNING: long post ahead)

Curius Dentatus — Wed, 07 Apr 2010 13:48:48 GMT

I think you are down playing the violence that has occurred between tribes in Africa. Africa was not an exception to human flaws. The hatred (racism) between tribes ran deep (funny how the same happened in Europe Danes, Normans, Celts, Irish ,Welsh, Lapps etc,etc) to the point of genocide and slavery. I still beg to differ about the formation of the state/kingdoms/fiefdoms brings prosperity. The state forms when wealth appears not vice versa! Please explain to me in this pre-colonial map of Africa the reason why there is barely any kingdoms in this prosperous country, if the state appears before wealth.

http://lissanonline.com/blog/?p=506

Re: Anarchy Revisited (WARNING: long post ahead)

Merlin — Tue, 30 Mar 2010 07:49:23 GMT

About the fact that tribal societies might not be anarchistic: violence is not used with the exception of in the enforcement of rules generally held by everyone. These societies are anarcho-communistic, but certainly anarchistic (from a monopoly of violence perspective). Ancap is not the only from of anarchy.

Second, you go (as I did for a long time) with the idea that the west grew richer because its state or semi-state apparatus allowed some freedom. Now, that would fly in the face of what we see in the developing world. In many poor countries the state can do almost nothing. It’s just too poor to enforce its will. This is as true as it comes in sub-Saharan Africa: there the ‘government’ controls only the capital (at best). Basically the situation in feudal Europe: and still Africa is getting poorer (not every country, as you point out).

It thus would seem that only in those places where the ideas of private property have developed, does government non-interference bring prosperity, other societies just stagnate. So we must try to see hwy is it that some societies develop the ideal of private property (and, oddly enough, the State along with it) and other do not.

Third, you mention the plunder mentality of tribes, but that, I’m afraid, does not hold well for 90% of tribal societies known. Most have been peaceful, closed and engaged only is sporadical “wars” fought by families, rather than villages. So plunder to is not a good explanation.

Finally, it is true that we have never seen the need to force people into the market but one must see the perspective. You are speaking, as Mises did, form a westerners perspective, i.e. of someone who lives in a society where the majority (if not the crushing majority) of people do long for a better life. It follows that those that come to the west are too, by definition, seeking to improve their material wellbeing. But that is not always the case in less developed countries. Again, I’m not saying that the use of force as taxation to bring people it note market is moral but is inevitable.

Re: Anarchy Revisited (WARNING: long post ahead)

Anders Mikkelsen — Mon, 29 Mar 2010 20:19:31 GMT

I suspect the real story is that the states of the west were somewhat more free than their predecessors. They allowed citizens and officials relatively more freedom for good or ill. While merchants, scholars, inventors, and scientists were freed in the west, sailors, merchants privateers and buccaneers, generals, admirals, were free to run amok about the rest of the world pillaging, conquering and trading.

Benjamin Constant might be a good thing to read - On the Liberty of the Ancients Compared with that of the Moderns
mises.org/daily/2524
He mentions the thin line between piracy and trade. He also discusses how unfree to our ears the ancients were.

The old tribal system may have in fact been quite unfree, leaving little room for individual initiative or property. Tribes saw opportunity for plundering their neighbors which wasn't good overall, but worked out for the victors.

One might also look at Feudalism as the privatizing of the old roman imperial apparatus. At all levels of society there was a vague idea that power and property belong to individuals and can't just be re-arranged willy nilly due to the whims of the court.

This is a very loose account of course.

Re: Anarchy Revisited (WARNING: long post ahead)

Anders Mikkelsen — Mon, 29 Mar 2010 20:07:53 GMT

Merlin:
Absolutely everything they got form their empire they could have got by simple free trade.

Again, you have to look at the specific colonialists involved. Many of them enjoyed an increase in social standing and wealth through their activities. Many people also enjoy power. If they can excuse their behavior with saying it is for the natives own good, they're helping free trade or whatever, so much the better from their viewpoint. However we shouldn't be fooled by the intentions of people - instead we should look at what they do and how social institutions function. (Similarly many people engage in marketplace activity to increase their own well being - that is the intention. Others may genuinely intend to increase the well being of their clients or customers. But the social function of the marketplace is to sustainably increase the well being of all people who choose to participate in mutually beneficial exchange.)

With your example of tribes their social rules may be unfree. There's plenty of evidence that in lots of societies the rules don't include minding your own business and respecting others property. The absence of a state or political apparatus doesn't indicate a free society.

Slave Labor may not be good for society long term, however in the short run it may be good for the slave holders. This is especially true if the costs of slave holding are externalized, e.g. dragooning the local free population in to patrolling for runaway slaves.

Similarly the communist system seemed like a good idea for the people in charge. Eventually though they realized it was pretty lame being the top dog in a poor country while their peers were living large in the west. Now the elite in Russia for instance lives a life of luxury at the cost of giving up some but not all power.

Gaining wealth by the political means is a balancing act, you don't want to kill the goose that lays the golden egg. You have to convince the people that State control is necessary for their own well being without actually actually exercising that control to such an extent that everyone goes broke.

I have to reject any arguments which say that we have to force people to be free. That progressive instinct was responsible for the ruin of the US. There the old WASP class was horrified by the immigrants and they worked very hard to force them to be good Americans. The cost was high. However ethnic enclaves continue till this day, while at the same time even many non-european immigrants are very Americanized. In either case those who saw the benefits of integration chose to do so. If there is a loss to society by people not joining the market economy, the price price of forcibly integrating them is the loss of liberty and a move away from a free society.

I genuinely think your long post is worth thinking through. There seem to be some hidden assumptions in there that you may wish to expose and double check.

Re: Anarchy Revisited (WARNING: long post ahead)

Merlin — Mon, 29 Mar 2010 18:47:00 GMT

Anders Mikkelsen:
Colonial empires happened because they increased the power and pelf of the colonialists. It goes back to Columbus, if not the crusades.

Well, power cannot yield anything in itself. No one seeks power for its own sake, but because of the wealth it brings. Jerusalem’s conquest did serve as a taxing center on the middle-eastern trade. But what wealth did colonial possessions bring to the brits? Absolutely everything they got form their empire they could have got by simple free trade.

At the heydays of the global free-trade system, it didn’t matter at all for the British PM whether some spot of Africa was independent, British, French or whatever as long as trade flowed unhampered. So, holding the innate tendency of the state to expand as an explanation for colonialism would appear to make little sense: those colonies where yielding nothing that simple free trade couldn’t (on the other hand, Russia’s empire was a true power-seeking empire as taxation was imposed in every newly acquired land). The fact that such empires where instituted nonetheless shown not a lust for power, but the fact that, left to their own, these countries would not have participated in the global division of labor. That, I believe, is telling.

PS: note that the Chinese too had tried to ‘colonize’ Africa for the very same reason.

Anders Mikkelsen:
he State is often used to mean any government. However one should use van Crevelds insight that the state is a modern concept dominant from 1648-1945 and slowly cracking today. The State is an abstract corporation - it sits above society and controls and is separate from the military. By contrast in Feudalism society (the part that counts) is the military and the government. Similarly in ancient Greece the free men all fought and the city and state weren't really distinguishable. The Roman Republic is the military - it's like the roman militia would get together and vote and that would be the government.

Just because you have a state doesn't mean you have anarchy.

Having lots of powers and people fighting each other is not anarchy. They're all attempting to increase their rule.

I don’t believe that what Creveld considered a state is what us here consider a state. As you point out, Creveld considered a state that entity which has an independent existence of the rulers, the later being ‘the government’. To us it doesn’t matter: the moment people believe that some entity has the right to violate the NAP, than we have a state. To us it doesn’t matter whether it is a republic, personal king, feudal lord or anything else.

In this sense I say that tribes lack a state: no one has the right among them to violate the general social rules. Not clansmen, not chiefs, no one. They are not some sort of personal government, but indeed lack a state as a violator of rights. That they live in anarchy and yet refuse to advance their well-being is indeed their free choice, but is also the root of the State, i.e. the fact that in some occasions enslaving someone is better than trading with him.

Let me furnish one more example: slavery. We know that slave labor cannot compete with hired labor: it’s just so unproductive that no company using forced labor would survive on the market. Why then, did slavery arise? Shouldn’t slaveholders had gone bankrupt by the conception of hired labor?

The only explanation I can see for the existence of slavery is that hired labor was not an option at all: back than, people would not work for you, for any wage. Thus the choice was not among unproductive and costly slave labor and productive and ultimately cheaper hired labor, but among slave labor and no labor at all. It is easy to see that , in these conditions, slave labor was a tempting option.

Re: Anarchy Revisited (WARNING: long post ahead)

Anders Mikkelsen — Mon, 29 Mar 2010 15:54:16 GMT

Hoppe pointed out that more liberal states like the US and UK have freer economies which grow rapidly, which give the state huge budgets to work with. Similarly Japan is limited by law to spending a small amount of its GPD on the military. It is so rich the military is fairly large.

Colonial empires happened because they increased the power and pelf of the colonialists. It goes back to Columbus, if not the crusades.

Anarchy on this site usually defined as the absence of rulers - an = without, archy = ruler(s)/archons. This means no Feudalism, City State apparatus, Cheifs, etc. It does allow for free chosen judges.

The State is often used to mean any government. However one should use van Crevelds insight that the state is a modern concept dominant from 1648-1945 and slowly cracking today. The State is an abstract corporation - it sits above society and controls and is separate from the military. By contrast in Feudalism society (the part that counts) is the military and the government. Similarly in ancient Greece the free men all fought and the city and state weren't really distinguishable. The Roman Republic is the military - it's like the roman militia would get together and vote and that would be the government.

Just because you have a state doesn't mean you have anarchy.

Having lots of powers and people fighting each other is not anarchy. They're all attempting to increase their rule.

Re: Anarchy Revisited (WARNING: long post ahead)

Merlin — Mon, 29 Mar 2010 08:34:35 GMT

Anders Mikkelsen:
Yes, but more anarchic societies out-compete others.

Could you elaborate?

Anders Mikkelsen:
This bears a tenuous relationship at best with history.

Perhaps not that tenuous after all. Beforehand, I must say that I’m no expert on colonialism.

But think about it: The brits colonized north America and Australia early on, and yet hold only mere outposts in Africa well until the mid-XIX century. Why?

The French went though a very heated parliamentary debate after Napoleon III was done to expand their empire in Africa.

The yanks where in a position to subjugate Japan but, after the Meji restoration, did not even try to.

Bismarck was adamantly against Germany having a colonial empire, although we all know how much into ‘glory’ he was.

The brits where asked by the Canadians to stay on: they had decided that keeping troops in north America wan not worth it.

In general what we know as “colonialism” developed very late, lasted not even a generation and was dissolved very easily (with the exception of those instances when colonies of Europeans had settled in the new land, as in Algeria or Kenya). So, a close look would revel that the European power did not care at all about their colonies, and where happy to let those go when they where ready to (again, not always). Why?

It is true that individual could profit much form such ventures. But attributing colonialism to the ‘greed’ of some would be like saying that the Nazis invaded the USSR because Goebels wanted a dacha in Crimea.

I think the true reason of the development of colonial empires was that, in a true Misesian fashion, those countries where dead weights for European powers, who would have been happy to deal with them as market economies.

That’s why Japan was never attacked but was happily left alone after it restored a market economy. The same goes for North America and Australia. Even China was left alone when in showed that it was ready to trade freely. The other countries had to be coerced to. Somewhere it worked (South Africa, north Africa), somewhere else didn’t (most of sub-Saharan Africa).

But attributing the massively unprofitable colonial empires to the greed of a few would be assuming away the fact that the whole of India was the private property of the East India Trading Company (until Disraeli ‘nationalized’ India), with almost no unpaid british soldier stationed there. How was cost being defer to the taxpayer there?

Anders Mikkelsen:
In some ways too I think your argument implied that the state requires a market economy. The albanian tribal anarchists aren't real in to the market, this keeps the state from getting going. Since the state is nothing without money, this makes quite a lot of sense.

So where the Sumerians anarchists? The simple fact is that “states” are known to have existed almost form day one of civilization. And this happened in every disconnected theater where civilization appeared: the Fertile Crescent, India, China, and Mesoamerica. Everywhere civilization had a state. Is that just pure chance? Or did the original sapienses move form Africa with a formed state?

And than again, feudal lordships where instances of non-monetary-based statist entities. So states can emerge without money being present.

And finally, what would keep a local lord form requiring payment in kind form the tribesmen and the selling those in the city market? We saw that the tribesmen have a lot of free time and it would be possible form them to produce that surplus. I do not see why a state could not emerge there. Theoretically it could. The presence of spare time invalidates the theory that this is a too subsistence-based society for a state to emerge.

Now, practically, the state hasn’t formed because the state-forming mechanism I assumed in the OP cannot work here. If you wish to have a better life, you do not set out to institute a state, but you just move to the city. Thus, if no outside power conquers these villages, states will never form there. Basically the situation in Afghanistan. But theoretically a state could well form.

Finally, let us hypothesize what would happen should a state form, somehow. The lord would impose a payment in kind. Forced to pay it, the local would find their well-being below their ‘breaking point’ and would seen to increase it again. They would thus trade somewhat more with the city, save something for investment, and both.

Seeing increased production, the lord imposes increased taxation. The inhabitants, amusing their initial revolt fails (why do revolts always happen only when a new tax is imposed?), they would be forced to same even more and trade even more. In time, the process would giver rise to a society depending fully on the division of labor and capital accumulation. Money would emerge and, perhaps, people would tend to lose sight of their original breaking points. They would actually begin to long for wealth for its own sake, not for the taxpayer’s sake. When most people feel this way, the state has no purpose. Basically, that is my theory.

Re: Anarchy Revisited (WARNING: long post ahead)

Merlin — Mon, 29 Mar 2010 08:00:18 GMT

Anders Mikkelsen:

Merlin:
Very true. And why is it so? They certainly have had just as much time as us others to 'discover' the free-market way. If they haven't it must be that they do not wan to. They consider subsistence sufficient. That's why Africa will have to go through bloody dictatorships for generations to come to drag its people out of that mindset.

Actually it is the dictatorship that keeps the mired economically. Like anyone else Africans engage in trade. Botwswana (just north of South Africa) for example has a government that respects property rights allows people to operate relatively unhindered in the market. The per capita income is about about $14,000 per person, one of the highest in Africa and twice that of Albania. In general the country has a good reputation.

It did not get this was because of government intervention. Quite the opposite.

A ‘dictatorship’ in Africa is much ‘better’ than a ‘democracy’ in the west because the dictator in Africa can control only a couple of blocks at most. Villages are practically anarchic and will remain so in the foreseeable future. If I where to move to some African strip with no more than 15 armed guard I would live under anarchy. And still the place is dirt-poor.

As for Botswana, sure, South Africa and Egypt, Libya and Tunisia, Algeria and Morocco and many other countries, I’m sure, are quite developed. But saying that this is so because their government refrain form intervening would be to skip one step: the government of those other countries cannot interfere at all! Botswana’s government can but still refrains form.

I didn’t mean that the whole of Africa is made up of people who do not long for more. Some countries, for sure, are functioning markets. Botswana is one: there many people (but not most, I’m sure, if most people would long for more the place would be a mass democracy) do long for more: hence there development is possible (government permitting). But in, say, Congo, even if the government where to lay totally still tomorrow, and refrain form doing anything at all, the place would yet not prosper. It would remain dirt-poor as it is (my take, I cannot ‘prove’ that, of course).

Re: Anarchy Revisited (WARNING: long post ahead)

Anders Mikkelsen — Mon, 29 Mar 2010 04:40:07 GMT

Merlin:
Very true. And why is it so? They certainly have had just as much time as us others to 'discover' the free-market way. If they haven't it must be that they do not wan to. They consider subsistence sufficient. That's why Africa will have to go through bloody dictatorships for generations to come to drag its people out of that mindset.

Actually it is the dictatorship that keeps the mired economically. Like anyone else Africans engage in trade. Botwswana (just north of South Africa) for example has a government that respects property rights allows people to operate relatively unhindered in the market. The per capita income is about about $14,000 per person, one of the highest in Africa and twice that of Albania. In general the country has a good reputation.

It did not get this was because of government intervention. Quite the opposite.

Re: Anarchy Revisited (WARNING: long post ahead)

Anders Mikkelsen — Mon, 29 Mar 2010 04:22:35 GMT

Merlin:
it would have long perished due to competition from anarchic societies. We would know no such thing as a state nowadays.

Yes, but more anarchic societies out-compete others.

Merlin:
if there where some way in which African tribes (to name only one instance) where to be persuaded non-violently to join the market, the brits would not have had expensive troops up there.

This bears a tenuous relationship at best with history.

Merlin:
the vast majority of the world will have to join a market economy for the state to loose its function.

In some ways too I think your argument implied that the state requires a market economy. The albanian tribal anarchists aren't real in to the market, this keeps the state from getting going. Since the state is nothing without money, this makes quite a lot of sense.

Re: Anarchy Revisited (WARNING: long post ahead)

Anders Mikkelsen — Mon, 29 Mar 2010 04:16:18 GMT

Curius Dentatus:
Guess I should stop assuming people are familiar with Bastiat.

I am familiar with him.

Re: Anarchy Revisited (WARNING: long post ahead)

Merlin — Sun, 28 Mar 2010 22:39:43 GMT

Thanks!