August 31, 2005 Leave a comment
August 31, 2005 Leave a comment
That article was also the beginning of my education in economics, particularly how money works. I have purchased “Economics in One Lesson” by Hazlitt and “Economics for Real People” by Callahan. I have only skimmed Mr. Hazlitt’s book, since I didn’t find the “present a common fallacy and then debunk it” to be a good way for me to learn. Mr. Callahan’s book, which started with simple, hypothetical desert island examples, did better in helping me understand the evolution and functioning of money and economies in general.
I take special note of his preference for Callahan over Hazlitt since
- I read Hazlitt before Callahan, and liked starting my economics education in that order, and
- I recently expressed the opinion that debunking might be more important than teaching/learning the basics.
Re Liberty Dollars:
I first encountered the Liberty Dollar at the 2004 Porcupine Freedom Festival (the mascot for the Free State Project is the porcupine, and the project has a week-long party in New Hampshire once a year). I heard people stating that they didn’t see why they would pay $10 when the spot price was $6 or $7, or why anyone would accept it as $10 just because it has $10 stamped on it. I don’t remember Mr. NotHaus’ reply well enough to repeat it here, but it left me wondering. I checked out his website. The arguments against fiat money were easy enough to understand, and I started to think the markup was justified because he was doing the work of exchanging the paper notes for higher denomination notes if the price of silver went above a certain point. I think this was promoted as the mechanism by which your “money” kept its value, unlike inflationary U.S. currency. I couldn’t get over the idea, though, that SOMEONE was eating the difference between a coin that contained (supposedly) $7ish worth of silver plus some manufacturing costs and the $10 on the face. And, since his plan was to go to a $20 base once a 30-day average for silver hit $7.50, once that happened his markup would be even greater. $7.50+ in silver with $20 stamped on it clearly seemed wrong. I thought I read somewhere on the site that the reason for marking with Dollar denominations was supposedly to help people get used to thinking in terms of quantities of silver again. That sounded nice at first, but then the thought occurred to me that people might not actually associate the bills with a particular amount of silver. They would probably just assume the $10, $5, and $1 certificates were the same as US$10, US$5, and US$1.
[That's just an excerpt of the long email he sent.]
Here is my reply:
Mr. B?, thank you for the note and thank you for your comments on Gilligan. That was by far my most-read piece.
I’m going to post a couple of your comments to my blog (and thanks especially for the “Frank and Ernest” cartoon) [...]
I appreciate your comments on Hazlitt and Callahan and plan to mention them in my blog. You may be interested in this new development:
Re Liberty Dollars: I’m definitely interested in strategy, but I don’t feel I have anything noteworthy to say on the subject. I recommend reading Murray Rothbard’s What Has Government Done to Our Money? — http://www.mises.org/money.asp — and also “The Case for a 100 Percent Gold Dollar” — http://www.mises.org/story/1829 — which are going to be published together soon: http://www.mises.org/story/1848
I don’t think it makes sense to call anything a “dollar” while people associate the word with Federal Reserve Notes. Rothbard believed that the word “dollar” was essential to a new gold standard, that the United States needed to in effect denationalize the dollar — liquidate government holdings, including all the confiscated gold, and define the dollar as that fraction of the American gold supply now available on the market.
I’m not as convinced that the word is so important. In fact, I’d like to see money expressed in explicit units of weight rather than in local synonyms. (A “dollar” used to mean an ounce of silver — but who knows that?) At the moment I put more faith in a future global free-market monetary system based on grams of gold, held in regularly audited gold warehouses. People would have to learn to think in terms of grams instead of dollars or pesos, but we’ve seen almost all of Europe do something similar recently with the transition to the euro, so I’m not as pessimistic as Rothbard was.
By the way, Joe Salerno, in his summer seminar at the Mises Institute, talks about strategies for returning to a commodity-metal standard:
Followup from Mr. B?:
One of the links referenced your piece on “evil magicians”. I read that piece when you posted it, but at the time I didn’t follow the link to the article on “magic multipliers”. Coincidentally, just a couple of days ago “Frank and Ernest” touched on economics again, this time mentioning the multiplier effect:
Perhaps in Mr. Thaves’ case, reading the Hazlitt book first WOULD be the better way to go. Or perhaps he should read Mr. Shostak’s article.
August 30, 2005 1 Comment
I didn’t cook much over the summer — not real cooking. I didn’t have my kitchen and my wife was on a different continent for 6 weeks, so I ate bachelor food with the occasional take-out or delivery.
Yesterday was the first day of classes for Professor Marcus and my first real day back in my househusbandly role.
Dinner was stuffed chicken breast (baby spinach, mozzarella, and prosciutto) served on a bed of more baby spinach with sauteed red peppers, eggplant, and toasted pine nuts. Rather than reporting the specifics, it turns out I can just link to 2 blog entries from last year:
August 30, 2005 Leave a comment
If I tell a kid that smoking is going to stunt his growth, and he smokes and keeps growing, has he proven me wrong?
(I have no idea if smoking really stunts your growth, but that’s not relevant to this point. Imagine whatever poison you need.)
With this example we all know that the kid can still grow while smoking keeps him from growing at the rate he would have or to the final height he would have. But notice, to account for cause and effect, we have to appeal to what would have happened and not just to the before and after of empirical reality. How fast and tall he would have grown is an assertion contrary to fact — thus, counterfactual.
All causal claims are counterfactual. When I say that A caused B, I’m not just saying that A preceded B; I’m saying that without A we wouldn’t have B. The “without A” is a counterfactual premise.
So when economic theory tells us that price fixing causes distortions in supply (with price ceilings causing shortages and price floors causing gluts), you can’t appeal to the before-and-after of a specific historical period as if it can disprove the causal claim. If the US Congress raises the national minimum wage (a price floor for labor) the result will be more unemployment (a labor glut) than we would have had without the change. Note: that doesn’t mean unemployment will rise! If you don’t understand that, please reread this post. If you still don’t understand, then either I’ve failed to explain counterfactuals or you’re too dim to understand cause and effect.
An example of the former is William Anderson’s “How To Create A Shortage”.
Some predictions are less uncertain than others. For instance, we can predict with an unpleasant degree of accuracy that hurricane season will be accompanied by economically illiterate editorials that destruction can be good for an economy:
“Katrina, which last week hit south Florida, was expected to cause a total of $10 billion to $26 billion in insured damages, according to hurricane modeling firms. It could be the most expensive storm to ever hit the United States. ‘There will be a lot of rebuilding that is going to need to occur. These things do spur GDP growth,’ said Ken Mayland, president of ClearView Economics in Pepper Pike, Ohio.” (Reuters, Monday)
Right on schedule.
FEE Timely Classic
“What Is Seen and What is Not Seen: The Broken Window” by Fr�d�ric Bastiat
August 31, 2005
A Price Gouging Reader
- Price Gouging Saves Lives by David Brown.
- In a Crisis, Markets More than Ever, by Llewellyn H. Rockwell, Jr.
- Oil Prices Again, by Murray Rothbard
- Creating Economic Crimes, by William Anderson
Is this is the first spotting of the “broken window” fallacy?
Spotted just now: what might be the first story claiming that the hurricane (actually the flooding caused by bad public infrastructure) will be good for the economy. It is from the New York Times/International Herald Tribuine (dated Sept 1):
But economists point out that although Katrina has destroyed a lot of accumulated wealth, it ultimately will probably have a positive effect on growth data over the next few months as resources are channeled into rebuilding. “Longer term, in the wake of a number of hurricanes there is actually an increase in measured output that even shows up at the national level, because there is a whole bunch of rebuilding activity,” said Stephen P.A. Brown, director of energy economics at the Federal Reserve Bank of Dallas.
August 26, 2005 Leave a comment
Another old review:
The most famous American anarchist.
Not only is Emma Goldman the most famous American anarchist, but she’s the only anarchist most Americans have heard of. (If they’ve heard of any.)
This is both good and bad news for American anarchists of a more individualist or philosophical inclination.
The good news is that there is at least one famous anarchist who is known more for her feminism and her rejection of war than for supposed murder plots or bombings. (Some might even know that she spent time in newly Communist Russia and rejected the growing authoritarianism and centralization she witnessed there.)
The bad news is that Emma Goldman’s philosophy is not well defined, and the anarcho-communism she is associated with does, in fact, deserve much of its association with bullets and dynamite.
While Emma Goldman did trace the roots of 20th-century anarchism to the 19th-century individualism of Ralph Waldo Emerson and Henry David Thoreau, she did not make self-ownership or individual sovereignty a clear and explicit part of her theory of freedom.
(It might be more accurate to say that she didn’t have a clear and explicit theory of freedom.)
Her own tendency toward individualism is simply an assumed part of her anarchism, where the other libertarian socialists and anarcho-communists with whom she is associated reject individualism as “typically American” (sneer implied) and see violence (a.k.a. “Direct Action”) and revolution as part-and-parcel with any movement toward anarchy.
In Anarchism, and Other Essays, we have Emma Goldman’s words at their most inspiring, and also at their most embarrassing.
She is right to recognize that authoritarian culture has deliberately cast “unregulated humanity” in a monstrous light — “Poor human nature, what horrible crimes have been committed in thy name!” — but she responds with an antithesis that would blame the Church, the State and Capitalism for every selfish act or unsavory inclination. She was a woman well ahead of her time, herald to late-20th-century feminism, reproductive rights activists, anti-war protestors and the civilly disobedient. Unfortunately, she is equally the harbinger of left-liberal guilt and class-based double standards.
August 25, 2005 1 Comment
My ancient and creaky BlackCrayon book market is broken. Something changed on the Amazon side and I have yet to adjust whatever I have to adjust on my side.
I think after about 5 years as an “Amazon Associate” I’ve probably netted less than 1 book a year with this program, so I’m not feeling a strong incentive to fix that part of the website. (Also relevant to my morale and motivation: I stopped programming about 2 years ago when I turned to Austrianism, reading, writing, editing.)
But my reviews aren’t working either, which does bother me. I’ll get around to fixing whatever’s broken, but meanwhile, I thought I’d re-post some reviews here.
The first is inspired by news from Wally Conger that there might be a big screen version of Heinlein’s The Moon is a Harsh Mistress in the works. (And by someone who is (a) connected to Firefly, (b) aware of what libertarianism is (although he miscapitalizes the word), and (c) aware of the fact that Hollywood is much more interested in Marxist screeds than in libertarian screeds!)
Libertarian Revolution on The Moon — 2076.
Robert Heinlein’s The Moon Is A Harsh Mistress tears at the heart of serious, freedom-loving readers.
It was the first story to get many of us to seriously question the legitimacy of government.
For me, it was both the first novel to use the term ‘anarchist’ to mean something peaceful rather than violent or chaotic, as well as the first novel to emphasizes the difference between “national” liberation and personal freedom.
But after the protagonist, Manuel Garcia O’Kelly, comes to believe that government is as much a threat to liberty as it has ever been any form of protection, he is left with the sad impression that government is inevitable, however much we struggle to do better.
O’Kelly’s friend and mentor, Professor Bernardo de la Paz is based on Heinlein’s libertarian anarchist friend, Robert LeFevre.
The Professor’s advice to the framers of Luna’s post-revolution government:Accentuate the negative!
De la Paz fears that the newly empowered Lunar citizens will want to make a law for everything.
In this case, accentuating the negative means creating laws that restrict what the government can do. He wants the citizens to empower themselves not as a collective entity, but as peaceful individuals.
The Lunar rebels declared their independence from Earth on July 4th, 2076 — hoping to equate their struggle with Thomas Jefferson, et al., but where Jefferson had said “The policy of the American government is to leave its citizens free, neither restraining them nor aiding them in their pursuits,” the new Lunar government is unpersuaded by the warnings of Professor de la Paz and Jefferson himself.
Those who are attracted to government “service” are there to pursue their own visions of a better society, not to stay out of the way of those who disagree with them.
In his own politics, Robert Heinlein was a libertarian minarchist who believed that the State is a necessary and inevitable evil. Once the population exceeds a certain size, all that’s left for an individual to do is move on.
There are many of us who are grateful to Heinlein for introducing us to the distinction between liberty and democracy, between personal freedom and collective sovereignty, between the society and the State.
But after giving us our first push in an unpopular and unsupported direction, he then refused to follow us to the natural conclusions of his own arguments. He was our ideological forefather, not our brother.
August 24, 2005 Leave a comment
My humorless friend* didn’t get that AbeLincoln is pronounced A blinkin’ …
Once I explained that to him, he pointed out that (1) HAL 9000′s light didn’t blink, and (2) HAL 9000 wasn’t really evil.
I hereby apologize to all and sundry for wasting their time.
* This is the same humorless friend from Straw Men & Ham Sandwiches.
August 23, 2005 2 Comments
Speaking of lists, another reason I should not be [starting a blog] is I am a compulsive list maker. And I know that writing a daily blog will only enable and further this problem. I don’t know if it is because of my German heritage, but my unexceptional life is exceptionally well documented. I should take a lesson from my ancestors, since making fully detailed lists of everything they did, didn’t work out so hot for them.
Before someone posts something about experimenting with cartoons to suit an audience is just crass commercialism a la Jim Davis or some other such pretentious bullshit, please refer to the URL. The characters name is Captain Capitalism. At least I am being up-front and honest about it. I am making these first cartoons mainly for myself. I dig the character. Then, I am going to see what happens — and I am using the character as a tongue-in-cheek way to poke fun at the whole idea of the experiment, too. I would think everyone would admit, it is hard to “sell out” a character named Captain Capitalism.
August 22, 2005 2 Comments
Before the Russian Revolution, the Communist Party had two wings: Bolshevik and Menshevik. The Bolsheviks believed in the immediate establishment of socialism through violence. The Mensheviks (who also called themselves social democrats) argued for a gradual, non-revolutionary path to the same goal. Liberty and property were to be abolished by majority vote.
The Bolsheviks won, but after committing unimaginable crimes, they have pretty much disappeared. The Mensheviks, however, are taking over America.
Our local Menshevism has its roots not in Lenin’s Russia, but in the London of 1883, when a group of go-slow socialists founded the Fabian Society. Headed by the appropriately named Herbert Bland, its most famous members were playwright George Bernard Shaw, authors Sidney and Beatrice Webb, and artist William Morris.
The Fabians took their name from Quintus Fabius Maximus, the Roman general who defeated Hannibal in the Second Punic War by refusing to fight large set-piece battles (which the Romans had lost against Hannibal), but only engaging in small actions he knew he could win, no matter how long he had to wait.
Founded the year of Marx’s death to promote his ideas through gradualism, the Fabian Society sought to “honeycomb” society, as Fabian Margaret Cole put it, with disguised socialist measures. By glossing over its goals, the Fabian Society hoped to avoid galvanizing the enemies of socialism.
The Fabian stained glass window, now installed at Beatrice Webb House in Surrey, England, shows George Bernard Shaw and Sidney Webb reshaping the world on an anvil, with the Fabian coat of arms in the background: a wolf in sheep’s clothing.
That wolf is now at our door.
Lew Rockwell, “The New Fabians”
For more on the Fabians, listen to this half-hour talk by Robert LeFevre: