Archive for July 2012 – Page 2

On Pure Capitalism

“A social system based on this natural position regarding the assignment of property rights is, and will from now on be called, pure capitalist.  And since its ideas can be discerned as the dominating ideas of private law, i.e., of the norms regulating relations between private persons, it might also be termed a pure private law system….This system is based on the idea that to be non-aggressive, claims to property must be backed by the “objective” fact of an act of original appropriation, of previous ownership, or by a mutually beneficial contractual relationship.  This relationship can either be a deliberate cooperation between property owners or the deliberate transfer of property titles from one owner to another.”

–Hans-Hermann Hoppe.  A Theory of Socialism and Capitalism

More Problems for Positivist Social Science

An amusing thing about Friedmanite positivism is its remarkable naïveté about how empirical social science research is actually done. Quantitative empirical analysis in practice is nothing at all like the model described in Friedman (1953). Results are rarely conclusive. Disagreement (and fighting) is widespread. Some theories are so widely believed that no amount of empirical evidence will dislodge them. A renewed emphasis on identification and causal inference during the last few years has made things more interesting and some basic mistakes are being avoided. But Mises’s strictures still apply.

Lately there is a lot of discussion about academic dishonesty — fake data, mistaken (and even fraudulent) statistical inference, and more. A recent paper by Joseph Simmons, Leif Nelson, and Uri Simonsohn (via Paul Nightingale) discusses this problem in the context of applied psychology (as used in particular in management and marketing research). They emphasize the role of researcher judgment: choosing what data to collect, what tests to run, what results to report, and so on. They argue that common practices give researchers so much flexibility they can make almost any result look reasonable:

In this article, we accomplish two things. First, we show that despite empirical psychologists’ nominal endorsement of a low rate of false-positive findings (≤ .05), flexibility in data collection, analysis, and reporting dramatically increases actual false-positive rates. In many cases, a researcher is more likely to falsely find evidence that an effect exists than to correctly find evidence that it does not. We present computer simulations and a pair of actual experiments that demonstrate how unacceptably easy it is to accumulate (and report) statistically significant evidence for a false hypothesis. Second, we suggest a simple, low-cost, and straightforwardly effective disclosure-based solution to this problem. The solution involves six concrete requirements for authors and four guidelines for reviewers, all of which impose a minimal burden on the publication process.

Borgnine (RIP) on Politicians

Ernest Borgnine, who died yesterday, said this in an interview in 1998 (h/t Justin Ptak):

I’m 81 years old and I like to speak my mind. As a legacy, on the day I die, I’d like to have a newspaper publish all the things that I find wrong in the United States today. And my first would be to get rid of the politicians.

(Fantle, David; Johnson, Tom. 25 Years of Celebrity Interviews from Vaudeville to Movies to TV, Reel to Real, Badger Books (2004) pp. 106–113)

It is no surprise that not a single newspaper complied with his wish yesterday.

Mises Institute Estonia

Estonia is home to the latest Mises Institute (

From Paul Vahur, executive director, of Mises Institute Estonia:

We are glad to announce about the creation of Mises Institute Estonia (in Estonian: Misese Instituut). The founders were 10 members of Mises Circle Tallinn which was created in 2009. Mises Institute Estonia is politically independent and funded only by private donations.

The purpose of the Institute is to promote and advance in Estonia the theories of Austrian School of Economics and classical liberal and libertarian political theories. To achieve these goals, the Institute will regularly publish articles on its website, it will also hold conferences, educational courses and lecture. The Institute will publish books popularizing economic science and libertarian political theory.

The Institute will be headed by Paul Vahur. The members of supervisory board are Risto Sverdlik, Urmas Järve and Paul Keres.

Mises Institute Estonia is named after Ludwig von Mises, a renowned Austrian economist whose biggest contribution was to explain the cause of economic crises and why state’s economic intervention is doomed to failure. First Mises Institute was founded in 1982 in USA. Thanks to their great success many other Mises Institutes have been founded in recent years in other countries such as Poland, Brasil, Sweden and Canada.


Democracy: The Enemy of Liberty

“The theory involves a conceptual conflation of democracy and liberty (freedom) that can only be called scandalous, especially coming from self-proclaimed libertarians.  The foundation and cornerstone of liberty is the institution of private property; and private–exclusive–property is logically incompatible with democracy–majority rule.  Democracy has nothing to do with freedom.  Democracy is a soft variant of communism….the doctrine of democratic peace, which goes back to the days of Woodrow Wilson and World War I, has been revived in recent years by George W. Bush and his neo-conservative advisors, and by now has become intellectual folklore even in liberal-libertarian circles.”

–Hans-Hermann Hoppe, The Paradox of Imperialism

European Crisis Signal

The ECB has once again come to the rescue by cutting interest rates in order to forestall a collapse of the European economy. Also, in a “surprise” move, the Chinese central bank cut interest rates in response to a continuing slow down in economic activity.

When the Skyscraper Index issued a European crisis signal last summer the European stocks markets were riding a wave of optimism and the Euro was worth about a $1.50. Most European stock markets have lost considerable ground along with the value of the Euro. However, we can best visualize the economic trouble from where the skyscraper crisis signal was issued: in the London real estate market. The Shard Skyscraper (which issued the crisis signal by becoming the tallest skyscraper in Western Europe) opened its doors to a badly slumping real estate market. Its owners made the bad mistake of buying out one of its primary lessee at 70 pounds per square foot. Leases are now going for 55 pounds per foot and probably heading lower.

In addition to Europe, there has been a regional crisis signal in China and possible world crisis signals coming from both China and the Middle East.

Free Atlas Shrugged Lecture with David Gordon This Friday

Details here.

Liberty is Super Sweet!

“By such words, Hydarnes, you give us no good counsel,” replied the Lacedaemonians, “because you have experienced merely the advantage of which you speak; you do not know the privilege we enjoy.  You have the honor of the king’s favor; but you know nothing about liberty, what relish it has and how sweet it is.  For if you had any knowledge of it, you yourself would advise us to defend it, not with lance and shield, but with our very teeth and nails.”

–Étienne de la Boétie, The Politics of Obedience: The Discourse of Voluntary Servitude