old text + new tech

This article is a treasure trove of useful links:

Old books plus new technology can make modern-day liberalism the most refreshing and interesting movement around, giving the thoughtful young person a welcome alternative to the smug, hidebound intellectualism of the Left and the proud anti-intellectualism of the Right.

– Danny Sanchez, “In Praise of Old Books”

Would You Give Up the Internet for $1 Million?

I wish I had known of this video when we published "Luxuries into Necessities" last month.

It sometimes took many centuries until an innovation was generally accepted at least within the orbit of Western civilization. Think of the slow popularization of the use of forks, of soap, of handkerchiefs, and of a great variety of other things.

From its beginnings capitalism displayed the tendency to shorten this time lag and finally to eliminate it almost entirely. This is not a merely accidental feature of capitalistic production; it is inherent in its very nature. Capitalism is essentially mass production for the satisfaction of the wants of the masses.

– Ludwig von Mises, "Luxuries into Necessities"

That’s worth repeating:

Capitalism is essentially mass production for the satisfaction of the wants of the masses.

SMU professor Michael Cox has a couple of great lines in this video:

Things get better because, in order for me to succeed, I have to pay attention to your needs and wants. … I cannot make myself better off apart from making you better off as well.

Capitalism, paradoxically, starts with self-interest; but if it’s guided by freedom it maximizes social welfare.

not church, but …

“I asked at the desk of my hotel if there were any churches nearby. The clerk responded that there weren’t but that there was an In-N-Out Burger if I liked burgers. I thought back to the one time I’ve had In-N-Out, and it was definitely an experience that brought me closer to God. I later learned that she probably thought I meant Church’s Chicken restaurants, which diminishes the quality of the story somewhat.”

– Art Carden, “The Majesty of the Law: TSA Edition”

help support LvMI books


giving away what’s nonscarce in order to sell what’s scarce

Since Helio Beltrao’s speech at the Austrian Scholars Conference, I’ve been listening to The Starfish and the Spider.

Helio didn’t convey how knee-jerk leftist the authors are. I find it a difficult "read" for that reason. They even use the word "coercive" to describe voluntary hierarchy while giving a government agency as an example of a starfish organization and offering "free" universal healthcare for San Francisco’s children as an example of what decentralization can achieve!

They also compare Napster to a locksmith opening your home every day so that your neighbors can help themselves to your stuff, while also describing trespassing, breaking and entering into animal-testing labs, and stealing research records as "civil disobedience." Nothing vaguely libertarian in this book.

But if you can wade through all that, there’s a lot of interesting information, too. For example, a hint at the relationship between decentralization and the distinction between legitimate and illegitimate property:

The Spider and the StarfishFor some companies, decentralizing isn’t just a matter of trying to succeed; it’s a matter of survival. As in the music industry, starfish are wreaking havoc in the software industry. Unlike the litigious record labels, however, Sun and IBM have found innovative ways to ride the decentralized wave. IBM saw that Linux — the open-source operating system that rivals Microsoft Windows — was gaining traction. Instead of competing with the decentralized market entrants, IBM supported them. It deployed six hundred engineers whose sole job was to contribute to Linux, and it actively supported the development of Apache and Fire-fox, the open-source browser that competes with Microsoft’s Internet Explorer.

IBM’s strategy was based in part on the "whoever is my enemy’s enemy is my friend" philosophy. That is, "if these programs are hurting Microsoft, our competitor, then let’s help them." But it’s not just about thwarting competitors. IBM has predicted that open-source is going to win out in the end. The company could spend resources developing competitive products, but chances are they ultimately would lose out. The open-source movement simply has too much momentum.

Rather than try to develop a competitive operating system in-house, IBM supported the development of Linux, then designed and sold hardware and software that was Linux-compatible. IBM is harnessing the collective skill of thousands of engineers working collaboratively worldwide, and at no cost to IBM.

All of a sudden, there’s a new culture of collaboration among the world’s leading technology companies. What would inspire Scott McNealy, the chairman of Sun, to tell us with pride, "We’re building communities, we’re sharing"? McNealy is no softy, and Sun is accountable to its shareholders. And yet the company has made its once-proprietary server software, which accounted for $100 million in sales each year, open-source.

McNealy may have philanthropic values, but the decision to give away the software also came from economic necessity. The entire industry has shifted. Once one company offers decentralized open-source software, its competitors must follow suit in order to stay in the game. As with the record labels and eMule, the moment one decentralized force came into play, the rest of the industry quickly began to shift.

Like IBM, Sun has opted to forgo revenues from software sales in favor of making money on auxiliary services and hardware. The price of software is rapidly declining to zero, and the big players are looking for other ways of making money.

As the software industry becomes more decentralized, an entirely new logic system is being adopted. To a casual observer, what’s going on seems like something from Alice in Wonderland. Who would ever have imagined, for example, that companies would race to give away their software for free?

But it gets weirder. McNealy explained that IBM and Sun have both come out with similar software offerings based on the same open-source platform. "If either one of us doesn’t do a good job, you can switch," he said.

Wait a second. Let’s take a step back. McNealy is touting customers’ ability to switch away from Sun? Don’t companies want their customers to be "stuck" using their product? That used to be the case, but the open-source movement has thrown the industry into chaos. The availability of free open-source alternatives means that customers have a lot more freedom to leave.

Because Sun can’t lock its customers in, it has to take a Buddhist approach — a variation on the refrigerator-magnet proverb: "If you love someone, set them free. If they come back, they’re yours; if they don’t, they never were." "Over the last few years," McNealy told us, "we’ve let our customers leave Sun easily if we don’t have price performance. Now I argue they’re going to come back in droves remembering that we didn’t hold them up."

Is this the wave of the future? As industries decentralize, will companies give their customers freedoms that were previously unimaginable? One thing’s for sure: IBM’s and Sun’s hybrid solutions are the only way for them to remain competitive in an increasingly decentralizing industry. The combo special isn’t just a nice option — it’s often necessary for survival.

Conceived in Liberty, now in 1 (ebook) volume

Conceived in Liberty, 4-volume hardcroverConceived in Liberty, 1-volume ebook

Riggenbach reads “Flooding the World with Truth”

For our audiophiles, Jeff Riggenbach narrates Doug French’s Mises Daily “Flooding the World with Truth.”

I don’t know about you, but I found Doug French’s article inspiring. I usually hate fundraisers. There’s a reason for the popularity of the word “nagathon” among listeners of public radio.

That’s not how the Mises Institute does things. Instead of incessant pleading, LvMI motivates the troops and boosts morale during the darkest time on the calendar by reviewing how much we’ve accomplished this past year, how completely at odds our strategies are with everyone else’s, and how hugely successful they turn out to be, time and time again.

Doug’s article psyched me up for the coming year. It made me proud to be part of this ongoing effort.

Listening to it now, read in the voice of the institute’s best audiobooks, is newly motivational.

You can support the Mises Institute here.

good news for young libertarian scholars

Benjamin PowellBenjamin Powell, assistant professor of economics at Suffolk University, is the subject of the current Faculty Spotlight at the Mises Blog. I enjoyed the whole interview, but I wanted to highlight his advice to young scholars:

Are there any words of wisdom you wish to pass onto the next generation of Austrian scholars?

Ha. I thought I was part of the next generation! Did I get old recently? What I can say for those coming behind me, based on my limited experience so far, is that doing Austrian economics and libertarian research is not an impediment to professional success. As long as you are doing applied research that other economists are concerned with you can make Austrian and libertarian points and have a successful academic career. Personally I’ve found that when I work on topics like applied anarchism I’ve had better luck publishing that in well respected mainstream journals than I have with less radical topics. I think the same is true of most of my peers. Some institutes and scholars give advice to “hide your libertarianism and make something else the focus of your scholarly research.” I don’t think those people could be any more wrong. The time is great for young libertarian and Austrian economists. I hope more will join us in the development and application of the science of liberty.

biting the invisible hand that feeds us

For this one, I’ll just quote the opening paragraph:

If you haven’t listened to it, this talk by Jeffrey Tucker on “How to Improve Society” is excellent. He points out a phenomenon that a lot of us don’t really notice but that reveals itself as madness once you think about it. We venerate politicians and government officials, even going so far as to call them “public servants,” when most of their activity is wasteful, destructive, or superfluous. A lot of people vilify entrepreneurs and producers, even going so far as to call them “parasites,” when most of their activity is is what feeds us, clothes us, shelters us, warms us, and teaches us. We bite the hands that feed us while we kiss the hands that choke us.

Read the whole thing: “Making the World a Better Place” by Art Carden

reactionary or naive

A blog post from Mises.org that is worth quoting in full (and one that deserves to be spread around):

More freedom, less crime

December 23, 2010 by Edward Stringham

Since Walter Block (my most excellent college professor) and coauthors James Gwartney and Robert Lawson put together the Economic Freedom of the World Report fifteen years ago, economists continue to find that economic freedom is associated with many good things. But do these positives come at the expense of bad outcomes such as violence and crime? Sociologists Wenger and Bonomo write that “The relationship between crime and the terminal crisis of capitalism has become the subject of considerable debate….[But] the debate does not concern the role of capitalism in producing crime—to all but the reactionary or the naïve, such questions have long been settled.”

Noam Chomsky also wrote that, “there are consistent libertarians, people like Murray Rothbard– and if you just read the world that they describe, it’s a world so full of hate that no human being would want to live in it.” This runs contrary to economists such as Frederic Bastiat or Murray Rothbard himself who argue that the market creates a harmony of interests.

Who is right? In recently published The 2010 Economic Freedom of the World Annual report, John Levendis and I have a chapter that looks at international data and that finds countries with more economic freedom actually have significantly lower rates of homicide. Touché Chomsky!

Not only do classical liberals have well-thought-out theories of why markets increase peaceful interaction, but their theories are consistent with the facts. If the relationship holds, one of the best ways to decrease crime is to move towards laissez-faire. Read all about it in our article: “The Relationship Between Economic Freedom and Homicide.”

Edward Stringham, Hackley Endowed Chair for Capitalism and Free Enterprise Studies, Fayetteville State University