Author Archive for David Gordon

Peikoff on Snowden

220px-Edward_Snowden-2Leonard Peikoff, much to my surprise, has an excellent podcast on Edward Snowden.  He praises Snowden for revealing the vast amount of information the NSA collects about us. The government’s program is in essence totalitarian, and Peikoff aptly draws a parallel with Orwell’s 1984. To those who say that Snowden gave American secrets to Russia, Peikoff replies that even if this were true, Snowden is still a hero. Obama is a much greater threat to us than Putin. The information Snowden gave the American people about what the government is doing far outweighs in importance anything Putin may have learned from him about America.

Unfortunately, Peikoff  near the end  of the podcast reverts to form and calls for a nuclear attack on Iran; but at least he does not claim to derive the necessity of such an attack from “A is A”.

Kirzner on Rothbard

What did Israel Kirzner think of Murray Rothbard? Robert Wenzel has linked to a video interview of Kirzner that answers this question.  Kirzner calls Rothbard  “an extraordinarily brilliant person” and says that “genius is perhaps not too extravagant a word to use” about him.

Krugman and the Babysitters

749px-Paul_Krugman_BBF_2010_ShankbonePaul Krugman in End This Depression Now! and elsewhere uses a story about a babysitting cooperative near Washington, D.C., to illustrate how Keynesian stimulus policies work.  Each of the families in the cooperative needed a babysitter if it wanted to go out for an evening. Every family was given a certain amount of scrip, each unit of which was good for half an hour of babysitting services. If a family wanted to go out, it could use its scrip to purchase the hours of babysitting services it needed.

Unfortunately, the families got so little scrip to begin with that almost everybody preferred to offer to be a babysitter, in order to accumulate scrip, than to go out.  But if almost no one wants to go out, there will be almost no demand for babysitters and people will be unable to accumulate scrip. The system was at an impasse.

As Krugman tells the tale, the problem was solved by giving everybody more scrip. After doing this, people were more willing to go out, because they now had enough scrip to purchase babysitting time; and then those who wanted to accumulate scrip were able to find purchasers for their services. Krugman uses the story to show the merits of a Keynesian policy of stimulus. An increase in government spending can, he says, get us out a situation where almost no one wants to spend but almost everyone wants to save.

According to Tim Harford, in his recent The Undercover Economist Strikes Back, Krugman did not tell the full story. Just as Krugman says, the increased distribution of scrip got the babysitting cooperative going. What he failed to mention was that the cooperative soon broke down again. The amount of scrip grew beyond the amount needed to balance supply and demand for babysitting , and now people wanted to go out but there were few babysitters available. Because people had large amounts of scrip already, they saw no need to add to their supply of scrip through offering to babysit.

Krugman’s story, though designed to show the merits of Keynesian stimulus, actually shows, as Austrians have long pointed out, that. a stimulus policy can quickly become inflationary.

 

Binswanger on Anarchism

456px-BlackFlagSymbol.svgHarry Binswanger, a leading Objectivist philosopher, advances a simple argument that he thinks suffices to undermine libertarian anarchism. The argument is found in his article of January 24 for Forbes, “Sorry, Libertarian Anarchists, Capitalism Requires Government.”

Binswanger’s argument starts from a correct premise. In a free market exchange, each party to the exchange expects to benefit. In Objectivist language, a trade is an exchange of value for value. But force is not a value — it is the negation of value. Therefore, protective services are not a proper subject for market competition. They must be provided by a government monopoly.

As Binswanger puts his argument:

Production is the creation of value, and trade is the voluntary exchange of value for value, to mutual benefit. Force is destruction, or the threat of it. It may be the destruction of a value, as when a hoodlum throws a rock through a store window. Or it may be the destruction of destruction, as when a policeman pulls a gun on that hoodlum and hauls him off to jail. But in either case, it is the opposite of wealth-creation and voluntary trade.

Force properly employed is used only in retaliation, but even when retaliatory, force merely eliminates a negative, it cannot create value. The threat of force is used to make someone obey, to thwart his will. The only moral use of force is in self-defense, to protect one’s rights. . . . The wielding of force is not a business function. In fact, force is outside the realm of economics. Economics concerns production and trade, not destruction and seizure.

Ask yourself what it means to have a “competition” in governmental services. It’s a “competition” in wielding force, a “competition” in subjugating others, a “competition” in making people obey commands. That’s not “competition,” it’s violent conflict. On a large scale, it’s war.

I’m surprised that Binswanger missed the obvious mistake in this argument. A policeman arresting a suspect is not engaged in an economic exchange with him. So far, Binswanger is entirely right. But someone who purchases defense services from a protection agency is not using force. He is exchanging money for the service of protection; and that is, contrary to Binswanger, an exchange of value — money — for value — protection. The fact that protection may involve the use of force on criminals does not change its status as an economically valued good. Binswanger, in brief, confuses, the economic transaction of purchasing protection with the use of force .

Binswanger falls into a related confusion in another passage of his article. He says:

The anarchists object to the very idea of a monopoly on force. That only shows that they cannot grasp what force is. Force is monopoly. To use force is to attempt to monopolize. The cop or the gunman says: “We’ll do it my way, not your way–or else.” There is no such thing as force that allows dissenters to go their own way. If a man wants to have sex with a woman who doesn’t want it, only one of them can have their way. It’s either “Back off” or rape. Either way, it’s a monopoly.

This is not correct. Someone using force does not allow those whom the force is directed against to go their own way, true enough. But the user of force need not claim a monopoly. He need not claim that no one else is free to use force against his target. By the way, I would have thought that after The Fountainhead, Objectivists would stay away from examples that involve rape.

Binswanger’s article contains other mistakes as well. He says that a free market presupposes objective law, but he fails to show that objective law requires a government. But he devotes his principal attention to the argument that contrasts force with economic value.

As an Objectivist in good standing, Binswanger had better hope that this argument fails. The sort of government that Ayn Rand and her followers favor does not extract resources from people through taxation. It depends on voluntary funding, e.g, user-fees for its protective and judicial services. If Binswanger were right, such services could not be the object of market purchase. Because they involve the use of force, they are not a value. How then can they be offered for sale? Or does Binswanger think that it is all right to purchase protection from a monopoly, but not from a competitive enterprise?

By the way, readers who come across philosophical arguments that try to refute Austrian economics or libertarianism are invited to send them to me.

Economics and Value Freedom

3824791020_dc042b8cf6_bMises and Rothbard taught that economics is a value-free science. Propositions of economics, such as the law of diminishing marginal utility, neither state nor imply any judgments about what is good or bad, right or wrong. Robert Grant, an Irish philosopher who teaches at Trinity College, Dublin, disagrees. In an article that appeared January 23 on the Irish news website thejournal.ie ,  Grant claimed that “the view of economics as value-free is, at best, illusory and, at worst, dangerous.” Economics is not value-free, according to him; and the myth that it is helps nefarious supporters of the free market occlude the truth that the free market helps the rich, not the poor.

Grant’s argument against value-freedom in economics is not very good. He points out that economists choose to investigate certain topics rather than others, Their choices reflect the values they hold. “The very decision about what aspect of the world to examine is an expression of what is important to us, ie, an expression of our values. . ., economists can choose to aim their analysis at the private financial markets and the banking system, or they could focus on public issues such as welfare economics, or how to make healthcare affordable. Each analysis may display incredible intellectual and mathematical sophistication, yet the choice is a normative one. It means that you deem some particular issue to be more worth your time and effort than the myriad of other issues you could investigate. Values are inescapable.”

Grant has fallen into an elementary confusion. Of course he is right that your choice to study something expresses your values. It hardly follows from this, though, the results of your investigation are, in whole or in part, value judgments. When it is claimed that economics is value-free, the claim is about the propositions of economics, not the reasons economists have for studying these propositions.

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Rothbard on Coase

Murray Rothbard was an early admirer of Ronald Coase, who died Monday at age 102. In a memo in two parts for the Volker Fund, dated July 16, 1957, Rothbard reported on two series of lectures delivered by Coase.  He praised Coase’s insight that “under planning, government, if it cannot force labor directly, must. . .condemn any public criticism as subversive.” A free press requires free enterprise. Coase was a pioneer in calling for privatization of air frequencies, and Rothbard enthusiastically agrees with this proposal. Coase was of course a keen observer of the British scene, and the BBC came in for withering scorn from him. In the lectures, “the personality of the guiding genius of the BBC is deftly pointed up as the prototype of the arrogant bureaucrat.’”(This is apparently a  reference to Lord Reith, called by Churchill “that human Alp.”)

Rothbard reports on a second series of lectures in which Coase “shows that the post office originated in government thought control attempts and that the government still continues to censor and suppress communications it does not like.” Although Rothbard thinks that Coase erred by conceding that advertising can be “wasteful”, he applauds Coase for a “caustic statement that political propaganda is far worse, and consistently so, than any business propaganda in advertising.”

Rothbard’s enthusiasm for Coase is not unalloyed. He  finds “grave collectivist deviations” in Coase’s thinking. Coase wrongly allows a large role for the State to counter private efforts that make the economic system less competitive. Rothbard will have none of this.”But since the State can and has defined almost any act as reducing competition, this opens the gates for tyranny, or, as Coase admits, ‘a very considerable regulation of business by the State.’”

Rothbard’s memo on Coase is available in the collection Strictly Confidential (Mises Institute, 2010), pp.253-256.

Krugman on Economic Policy Uncertainty

In his column “Phony Fear Factor,” published in The New York Times on August 8, 2013, Paul Krugman mocks the view that “economic policy uncertainty” helps to explain the failure of the American economy to recover from the collapse of 2008. Unfortunately, Krugman displays little knowledge of the view he wishes to challenge. He says very little about it. As he sees it, it is the “the Great Whinethe declaration by one leading business figure after another that President Obama was undermining confidence by saying mean things about businesspeople and doing outrageous things like helping the uninsured.” Cutting away the rhetoric, Krugman is saying that the view he wishes to challenge claims that business is unwilling to invest because of a hostile “climate of opinion” in the Administration, as well as policies that business dislikes.

But this is not the uncertainty hypothesis, at least as this is found in the best version of it, the brilliant work of Robert Higgs on “regime uncertainty”. Krugman nowhere refers to Higgs; instead, he cites, if only to dismiss, the paper “Measuring Economic  Policy Uncertainty” by Scott R. Baker, Nicholas Bloom, and Steven J. Davis, economists from Stanford and Chicago.. The uncertainty view, as the word suggests, is that business is reluctant to invest because it isn’t possible to foresee what the government intends to do. The view is not that the government follows policies that business doesn’t like: if these were known, it would be possible for investors to take them into account. The claim, rather, is that investment is lacking because people are in the dark about the government’s intentions.

Krugman, following a paper of 1943 by the Polish Marxist Michal Kalecki, claims that business propagandists appeal to the lack of business confidence in order to deter the government from instituting policies that go against the interests of the wealthy. No doubt they do, but Kalecki’s point does not speak at all to the surely plausible hypothesis that doubt about the government’s intentions may adversely affect investment.

Krugman has another argument against the uncertainty view.  Recovery has been “slow”, he euphemistically says; but this is merely “the normal aftermath of a debt-fueled asset bubble”. Besides, we have failed to spend enough money. The logic of Krugman’s argument is hard to discern. It is hardly a point against the view that regime uncertainty inhibits investment to say that current investment has not been more lacking  than in periods that followed past economic collapses.

One implication of Kalecki’s paper should not be missed. Kalecki said that business assertions of lack of confidence could be countered by an increase in government spending. In other words, if private business will not invest, the government can  through increased spending step in to do the job. The is a recipe for government control of large parts of the economy, a state of affairs no doubt welcome to Kalecki and his latter-day successor.

Judge Napolitano at Mises University

Mises University this year featured a  “conference within the conference”.  The distinguished jurist and television commentator Judge Andrew Napolitano offered a course of five lectures on “The Growth of the Commerce Clause as an Instrument of Federal Power.” Judge Napolitano presented a masterful survey of how the Supreme Court has interpreted the commerce clause, from Gibbons v.Ogden (1824) to the present. In clear defiance of the plain meaning of the constitutional text, the Court expanded the scope of the clause so that the power of Congress to regulate the entire economy had by the 1940s become little short of plenary. Wickard v. Filburn (1942) was perhaps the culminating case in this sorry record of biased construction. Fortunately, the Court has recently indicated some willingness to recognize limits to the power of Congress in this area. In his final lecture, Judge Napolitano noted that in its recent opinion upholding the individual mandate of Obamacare  as an exercise of the taxing power, the Court also held that use of the commerce clause for this purpose was unconstitutional.

Judge Napolitano followed the Socratic method in teaching the course, but he was a Socratic interlocutor of great kindness, and it was clear that he had won the hearts of his students. His impressive command of the intricate legal issues at stake was everywhere apparent, and no less apparent was his devotion to individual liberty.

Oakley on Pathological Altruism

Barbara Oakley, an engineering professor at Oakland University in Rochester, Michigan, has just published in the Proceedings of the National Academy of Science, a brilliant article on “pathological altruism.” People often act out of a desire to help others, but this by no means ensures that what they do will have good consequences, whether for the intended beneficiaries or for others. Sometimes these bad consequences cannot reasonably be foreseen; but all too often action proceeds in blithe disregard of them. It is this sort of misguided action that Oakley characterizes as pathological.

Several of her examples deal with public policy and are likely to be of great interest to readers of this blog. The Fannie Mae and Freddie Mac loans aimed to promote better access to housing for those unable to meet prevailing standards to obtain mortgages. This misguided attempt to assist the disadvantaged helped to bring on a severe financial crisis. Foreign aid to Africa has served to entrench tyrants in power. More generally, various altruistic measures have led to a massive government deficit with dire consequences to come.

Oakley also gives examples of the baneful effects of pathological altruism in personal conduct. These effects are not confined to the intended beneficiaries or to third parties; the altruist may also in certain cases suffer personality damage. Oakley’s discussion of these various effects  is informed by an extensive knowledge of the literature of evolutionary psychology and other relevant disciplines. She calls for more research on pathological altruism but suggests that such research will confront obstacles. Researchers tend to be sympathetic to altruistically motivated conduct, even if it has bad effects,and as a result studies that challenge such conduct tend to be viewed with disfavor. People who criticize accepted ideas tend to have great difficulty in gaining an audience for their views. This suppression of research into the malign effects of altruism is itself an expression of pathological altruism. Oakley calls for a new research paradigm that will put an end to the harmful taboos that constrain the study of altruism.

Rothbard on Rent Seeking

Murray Rothbard anticipated the concept of “rent seeking,” generally associated with Gordon Tullock. In Man, Economy and State, he says:  “Furthermore, the more government intervenes and subsidizes, the more caste conflict will be created in society, for individuals and groups will benefit only at one another’s expense. The more widespread the tax-and-subsidy process, the more people will be induced to abandon production and join the army of those who live coercively off production. Production and living standards will be progressively lowered as energy is diverted from production to politics and as government saddles a dwindling base of production with a growing and more top-heavy burden of the State-privileged. This process will be all the more accelerated because those who succeed in any activity will invariably tend to be those who are best at performing it. Those who particularly flourish on the free market, therefore, will be those most adept at production and at serving their fellow men; those who succeed in the political struggle for subsidies, on the other hand, will be those most adept at wielding coercion or at winning favors from wielders of coercion. Generally, different people will be in the different categories of the successful, in accordance with the universal specialization of skills. Furthermore, for those who are skilled at both, the tax-and-subsidy system will encourage and promote their predatory skills and penalize their productive ones.” (Scholar’s Edition, p.942)

A similar passage can be found on p.1256. The latter is from Power and Market, which was not published until 1970; but Rothbard completed the manuscript of MES and Power and Market, which were written as part of a single work, in 1959. MES was published in 1962, and Tullock’s seminal article appeared in 1967.

Murray Rothbard in The New Yorker

Kelefa Sanneh,  a music critic and journalist who writes for The New Yorker, has a brief discussion of Murray Rothbard in his article “Paint Bombs” http://www.newyorker.com/arts/critics/atlarge/2013/05/13/130513crat_atlarge_sanneh?currentPage=all He devotes most of the piece to the anthropologist David Graeber, an anarchist but no friend of the free market, and his influence on the Occupy Wall Street movement. James C. Scott, another anthropologist who sympathizes with anarchism, also comes in for attention. Sanneh says that the  Occupy movement is not influential in electoral politics, but he finds one anarchist “who could be considered influential in Washington.” This is none other than Murray Rothbard, who is identified as Ron Paul’s intellectual mentor. Sanneh doesn’t say much about Rothbard, but discussions of anarcho-capitalism are hardly a regular feature in The New Yorker. As Samuel Johnson said, “it is not done well, but you are surprised to find it done at all.”

 

Is the NAP a Useless Tautology?

Julian Sanchez has carried criticism of the Non-Aggression Principle (NAP) to a new level. The principle tells us not to commit aggression; but, as Matt Zwolinski and others have pointed out, you don’t know what counts as “aggression” unless you know what rights people have. You can’t judge who the aggressor is simply by seeing who uses force first. The person who does so may be responding to a violation of rights and not be an aggressor at all. The NAP cannot, then, be used as an axiom to derive the rest of libertarian theory.

Sanchez goes further. The NAP is a tautology that adds nothing of importance to moral theory. A right is, by definition, a claim that is enforceable. “But all the real action is in the definition of rights; invoking the NAP adds nothing. It is tantamount to saying ‘only enforce rights that are really rights.’ To establish your right over (say) your car just is to establish that I ought not to take or use it without your permission (perhaps barring extraordinary circumstances, the parameters of which will tend to be implicit in the argument establishing the right). It is neither necessary nor illuminating to add the additional premises that taking what you have a right to counts as ‘aggression,’ and that one ought not to aggress.”

Here Sanchez has focused on the wrong word. He says, in effect, “Of course you should only enforce an enforceable claim. What else do you propose to enforce — a non-enforceable claim?” He is certainly correct that you shouldn’t enforce a non-enforceable claim, but he has missed something. He has not paid enough attention to “claim.” If you have a moral claim, then something is owed to you. Moral claims are personal. But some moral theories don’t tie the use of force to claims.

As an example, someone might favor transfers of wealth from billionaires to the poor on the ground that this will increase utility. The person might further hold that force can properly be used to do this. In taking this view, the person need not have rights in mind at all. The argument isn’t that the poor have a right to the transfers of wealth, so that if the transfers aren’t made, the poor have been deprived of what is morally owed to them. Rather, the theory holds that transferring wealth in this circumstance is a good thing to do and that’s all you need to justify using force.

In brief, there are non-rights based moral theories. The NAP, by tying the use of force to rights-violations, rules out using force to achieve moral goals not founded on persons’ claims. It is thus not a tautology.

Sanchez might answer that the NAP adds nothing to “People have rights” or a list of these rights.  These already exclude moral theories not based on rights. This answer is also not correct.  Someone who favored the wealth transfer might say that enough of an increase in utility overrides the billionaires’ property rights; the billionaires can be forced to transfer their wealth if they don’t want to do it. Again, this isn’t to say that the poor have a right to the transfer. Some moral theories include both rights and other considerations as well that justify using force. The NAP blocks using force that doesn’t respond to a rights violation, so it does add to “People have rights.”

Sanchez is correct that the NAP doesn’t by itself block a theory that includes non-libertarian rights, but this doesn’t make it useless for libertarians. The NAP doesn’t do everything, but it does do some things.

Zwolinski on the NAP

Matt Zwolinski, a libertarian political philosopher and the founder of the Bleeding Heart Libertarians blog, has a surprising proposal. Libertarians, he suggests, should drop the Non-Aggression Principle (NAP). The NAP holds that “aggression against the person or property of others is always wrong, where aggression is defined narrowly in terms of the use or threat of physical violence.”

Zwolinski raises six objections to the NAP, targeted especially against the way Murray Rothbard interprets it. Supporters of the principle need not worry. The objections don’t hold up.

Zwolinski suggests that, according to Rothbard, it would be wrong to trespass on someone’s property to feed a three-year old child whom someone was starving to death. The person starving the child isn’t aggressing against him, but trespass is aggression.

That is nonsense. To starve someone who cannot leave is to murder him. You don’t have to touch somebody to kill him: there isn’t a special libertarian concept of murder, different from the ordinary one. Neither is it the case that you are free to violate people’s rights, so long as you do so on your property. Rothbardian libertarianism is not the doctrine that each person is an absolute despot over his own property.

Zwolinski finds another flaw in the NAP. If, as Rothbard thought, industrial pollution violates the NAP, then must we not prohibit the slightest bit of smoke blown onto someone’s property, if the owner objects? Further, he asks in an earlier post, what if someone objects to a few photons of light beamed at him: should so trivial a matter be treated as harm? The NAP, taken strictly, threatens to derail nearly all human activities. If Rothbard replies to this that pollution below a certain level does not count as harm, why does he get to decide the limits of harm?

I don’t think Rothbard made the absurd claim that the limits of harm were for him to decide. Rather, he recognized that setting the limits of harm is matter of convention, settled by the understanding that prevails in a society. Zwolinski here falls into a mistake that many libertarians make. They deny a role to convention in delimiting the boundaries for the application of a concept: unless “nature” settles the matter, use of a concept is an all-or-nothing affair. Zwolinski‘s objection about risk fails for the same reason. Why must a supporter of the NAP hold that either all risks of harm must be prohibited or none? Once more, that dread word “convention” must not be uttered. Or is it rather that he thinks that Rothbard rejects it? Let us leave Zwolinski to sort out his own confusions on this question.

Zwolinski is not always wrong. He rightly notes that the NAP does not tell us what property rights people have. He is also correct that “aggression” in the principle must be understood to cover violations of property rights, as well as direct physical assault. Certainly Rothbard understood the NAP this way. But why, immediately before pointing this out, does he claim that a prohibition of fraud isn’t compatible with the NAP, because fraud is not physical violence? Is it too much to expect Zwolinski to realize that his point about the meaning of aggression invalidates his own objection regarding fraud?

Zwolinski concludes by suggesting that rather than deal with his objections by adding more epicycles to the NAP, we should, in a Copernican Revolution, put aside the idea that the NAP is the center of the moral universe. Zwolinski’s analogy limps: Copernicus offered an alternative to Ptolemaic astronomy but Zwolinski confines himself to posing objections to an existing theory. By the way, Copernicus’s theory has epicycles in it as well.

Ronald Dworkin, R.I.P.

Ronald Dworkin,  (1931-2013) who died yesterday, was widely regarded as America’s leading legal philosopher. He was decidedly not a libertarian, but libertarians will find much of interest and value in his work.  His defense of moral objectivity in his Justice for Hedgehogs (2011) is especially impressive. He argues that views about the nature of morality are themselves moral positions. If you say, e.g, that there is no objectively correct answer to the question whether abortion (or anything else) is morally  wrong, you are in effect saying that abortion is morally permissible. The supposed external criticism of morality–there is no such thing as moral truth— is really an internal proposal within morality. Many people will instinctively reject this “quietest” position; but if they do, they will I predict find it hard to show exactly where Dworkin goes wrong.

His famous essay “Is Wealth A Value?”, available in his collection A Matter of Principle, is a devastating criticism of Richard Posner’s wealth-maximization approach to law. Those of us who prefer a Rothbardian defense of the free market to the supposedly more scientific Chicago School view will find in Dworkin’s essay much of value. Although libertarians will find him far too egalitarian, he offers in Sovereign Virtue a strong emphasis on individual responsibility. In the same book, he offers some penetrating observations about Rawls’s Theory of Justice. My own favorite essay of his, also in A Matter of Principle, is his demolition of Michael Walzer’s Spheres of Justice. If you read it, you will see right away that Dworkin was a great critic.

Sorens on Raico

Jason Sorens has posted a very thoughtful review of Ralph Raico’s outstanding recent book, Classical Liberalism and the Austrian School.

I admire the post and learned from it, but I’d like to differ with Sorens on two points. He suggests that methodological individualism is vulnerable to criticism. “We can know that firms try to maximize profit even if we do not have a good explanation for why each individual firm tries to maximize profit, or why individuals have chosen so to organize themselves. ” He appeals here to what Bob Nozick called a “filtering device.” The explanation, I take it, is roughly this: to the extent that firms engage in profit maximization, they will tend to supplant firms that don’t.

But this explanation is entirely consistent with methodological individualism. This doctrine does not require that social outcomes be reducible to the motives of individuals. To the contrary, appeals to “the results of human action but not of human design” are quite common among Austrian methodological individualists.  In thinking that use of “filtering devices” in Nozick’s sense, irreducible to the psychological motives of individuals, conflicts with methodological individualism, Sorens has I think wrongly taken over Nozick’s unduly restrictive account of that doctrine, in his essay “On Austrian Methodology”

Sorens also remarks:  “However, what I have heard from contemporary Austrian economists such as Peter Leeson is that Mises himself was not opposed to hypothesis testing, even using statistical methods. He was merely opposed to Popper-style falsificationism (i.e., that every element of a theory must be falsifiable), which has in any case been superseded in mainstream philosophy of science. ”

Certainly, Mises did not oppose hypothesis testing in applying economics to historical issues; but in economic theory itself he was very much an apriorist. Mises himself is a much better guide to his views on method than “contemporary Austrian economists”; and if one consults Mises, whether he was an apriorist is not a difficult question to answer.

 

Williamson’s Howlers

The Politically Incorrect Guide series includes many excellent books, but unfortunately Kevin Williamson’s Politically Incorrect Guide to Socialism  is not among them. One turns to the book with interest, as the author is a firm opponent of socialism and has read Mises, Hayek, and Rothbard.  Unfortunately, the book cannot be recommended. Williamson lacks the ability to report facts accurately and his work contains preposterous errors.

Here are some examples. Williamson writes:

“The modern experience suggests that the economist Ludwig von Mises was only partly correct when he wrote, ‘The socialistic State owns all material factors of production and thus directs it.’ That was true for the authoritarian, single-party powers of his day. In our own time, the converse is a more accurate description of the real economic arrangement: under socialism, the state directs the material factors of production as if it owned them. The state does not have to actually own factories, mines, or data centers if it has the power to dictate, in minute detail, how business is conducted within them,” (Politically Incorrect Guide,p.15)

Can Williamson be so ignorant of Mises as not to know that the point he raises against Mises was a key insight of Mises himself? Mises writes in Human Action, e.g., “The second pattern (we may call it the Hindenburg or German pattern) nominally and seemingly preserves private ownership of the means of production and keeps the appearance of ordinary markets, prices, wages, and interest rates. There are, however, no longer entrepreneurs, but only shop managers (Betriebsfuhrer in the terminology of the Nazi legislation). These shop managers are seemingly instrumental in the conduct of the enterprises entrusted to them; they buy and sell, hire and discharge workers and remunerate their services, contract debts and pay interest and amortization. But in all their activities they are bound to obey unconditionally the orders issued by the government’s supreme office of production management. .  . This is socialism under the outward guise of the terminology of capitalism. Some labels of the capitalistic market economy are retained, but they signify something entirely different from what they mean in the market economy.” http://mises.org/humanaction/chap27sec2.asp

In another howler, Williamson writes: “The United States in the twenty-first century is not very much like nineteenth-century Prussia (Prussia today isn’t much like Prussia then, either.” (p.95) Evidently, Williamson does not know that Prussia ceased to exist in 1947.

Williamson’s ignorance is not confined to the European continent. He writes: “In India, British colonial rule came to a largely peaceful end thanks to the efforts of Mohandas K. Gandhi. . .” (p.51). In point of fact, after the 1947 partition between India and Pakistan, violent conflict between Hindus, Muslims, and Sikhs resulted in deaths estimated between 500,000 and 1,000,000.

Rather than presume to instruct others in history and economics, Williamson should acquire some elementary knowledge of these subjects.

 

Rothbardian History

Robert Wenzel would like to see more Rothbardian history.

He seems to me entirely right; it’s imperative that those who knew Murray set down their stories about him.  Here is one of mine to start things off. Murray had an incredible memory for historical  detail. One I was telling him that I had manged to stump Mel Bradford by asking him Rutherford Hayes’ middle name. Murray said, “It was Birchard, of course.”

The Circle Bastiat

The Circle BastiatThe Circle Bastiat, which flourished from 1953-1959, was a group of Murray Rothbard’s closest friends and disciples. Ralph Raico and George Reisman, while still in high school, began to attend Ludwig von Mises’s famous seminar at New York University. There they met Murray Rothbard, then working on his doctoral dissertation at Columbia, who had been an active member of the seminar for several years.

Raico and Reisman, impressed by Rothbard’s intellect, learning, and personality, soon became fast friends with him. They met him for long conversations, which ranged widely over economics, history, politics, and philosophy, after the seminar.

They were joined within about a year by Leonard Liggio, who had worked with Raico in the Robert Taft presidential campaign, and a little later by Ronald Hamowy, who had been friends since elementary school with Reisman. Robert Hessen also became part of the group, and sometimes Raico brought his friend, the philosopher Bruce Goldberg, to the discussions. (A couple of less well-known people also participated.) The friends met regularly at Rothbard’s Manhattan apartment and called themselves the Circle Bastiat, after the great nineteenth-century French classical liberal and economist. .The Circle came to an end after Raico departed for graduate study at the University of Chicago in 1959; Reisman and Hessen had left the previous year.

The Circle was notable not only for high intellectual quality but also for the remarkable good humor and camaraderie of the members. We have decided to name this blog after the Circle, both as a tribute and to set an ideal for participants to emulate.