Archive for Robert higgs

Video: Robert Higgs on the FDA and Consumer Welfare

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 23 July 2014.

Burgeoning Regulations Threaten Our Humanity

450px-Code_of_Federal_Regulations_Mid-Manhattan_LibraryInsofar as mainstream economics may be said to make moral-philosophical assumptions, it rests overwhelmingly on a consequentialist-utilitarian foundation. When mainstream economists say that an action is worthwhile, they mean that it is expected to give rise to benefits whose total value exceeds its total cost (that is, the most valued benefit necessarily forgone by virtue of this particular action’s being taken). But nearly always the economists make no attempt to evaluate as part of their benefit-cost calculus any costs that might be incurred as a result of how and by whom the action is taken.

Often they verge on the assumption that benefits and costs exist apart from those who take the action, even though this assumption clashes with the foundational principles of their science. Thus, in benefit-cost calculations, economists often attach a value to certain expected benefits (e.g., the dollar value of lives saved as a result of a safety regulation) and compare this value to the dollar outlays by the government that imposes and enforces the regulation and by the private parties who are compelled to comply with it, often at great private expense.

I cannot recall, however, ever seeing a benefit-cost computation that attaches any cost valuation to the loss of freedom by the regulated parties. It is as if it matters not at all that an action is mandated, as opposed to freely chosen. Freedom itself is, in effect, considered worthless, and hence its loss entails no sacrifice regarded as worthy of receiving weight in the calculation.

On the basis of such procedures, at least in a pro forma sense, countless regulations and laws have been imposed on the public willy-nilly. Apart from the many questions that might be raised even in the context of the usual benefit-cost study, one who values freedom cannot help but be struck by how entire societies have been overwhelmed by suffocating regulations and by how drastically people’s freedoms have been curtailed, all under the presumption that each drop of this deluge constituted a net improvement in social well-being. Insofar as the trampled freedom is concerned, the motto seems to have been: nothing valued, nothing lost.

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Robert Higgs at Lindenwood University

The Liberty and Ethics Center at Lindenwood University is headed by Prof. Rachel Douchant, a former Mises Fellow and Mises U alumnus. This year, the Center welcomed Robert Higgs for its keynote address:

Higgs was also interviewed for the Center’s video series, Free Exchange:

Chances Are that You Have No More Expertise in Economics than You Have in Astrophysics

Henri_Julien_Dumont_-_The_AlchemistAlthough the statement is commonly attributed to Mark Twain, his friend Charles Dudley Warner was the one who said, “Everybody complains about the weather, but nobody does anything about it.” Regardless of who said it, the statement was and remains fairly accurate.

In contrast, we might observe, “Everybody complains about the economy, and a great many unfortunately try to do something about it.” Economic policy is the name given to such attempts by government officials, their consultants, and their contractors. For the general public, economic policy is a tragic matter because regardless of what the man in the street may think, the government’s actions almost invariably make economic life worse than it would have been had the policy makers kept their hands off of it.

Despite a gigantic outpouring of talking, writing, and studying, at least 90 percent of this yammering is worthless, and much of it is positively harmful. Look, I’m not going to lie to you: I’m an economist. I’m not bragging about this professional status; it’s simply a fact. If I were a plumber or a carpenter, I’d admit being one just as readily. Now, tens of thousands of other people also say that they are economists, but scarcely any of them is so in more than a nominal sense. They may have a Ph.D. in economics, yet it remains the case that their ideas about economics are no better than your average crackpot’s. The overwhelming part of what people learn in graduate school in economics is mathematical mumbo-jumbo whose substance boils down—if it boils down to anything, rather than simply evaporating—to what F. A. Hayek called the pretense of knowledge. In short, these “experts” are ill-educated fakers. My best guess is that no more than a couple thousand real economists exist in the entire world, and I would not be surprised if my estimate were too high by a thousand.

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Why We Should Not Underestimate the State

799px-Police_State_Pittsburgh_G20Many of my friends think of the state as stupid, and therefore an easy foe for determined dissidents to defeat. I have a different view.

For one thing, the state has always had ready resort to those with cutting-edge expertise in the private sector, from the days when it hired Eli Whitney to manufacture muskets with interchangeable parts to our own time, when it hires Oracle, Microsoft, and a host of other high-tech companies to help it spy on us. History has shown that no task is so revolting and criminal that the state cannot attract private contractors to carry it out.

Moreover, even if the private-sector geniuses refuse to sign up, the state can, whenever push comes to shove, simply send its goons to smash your door and haul you off to one of its dungeons. Such actions, especially if taken on a wide scale, have a marvelously educational effect on dissidents and would-be dissidents.

Because the state has the capacity to raise enormous amounts of money and to bamboozle the great mass of the public, it can employ these two tactics — outsourcing of operations and use of raw force — pretty much as it finds optimal. It is a mistake to underestimate the state simply because its visible face consists of seemingly idiotic politicians.

Photo credit.

‘What are states but warlord organizations?’

800px-SWATK9Anarchists are constantly tempted to respond to their critics in a way that verges on the tu quoque fallacy — in children’s playground lingo, “it takes one to know one” — because often a critic’s claim about the horrors that anarchy would bring is essentially a claim that it would bring about a condition that already exists under the rule of states. Why the warlords would take over, the critic claims. But what are states but warlord organizations in their most developed expression? Why we’d have no protection against thieves and marauders, the critic claims. But today’s police provide no such protection. They are either marauders themselves or, at their best, worthless note takers who show up long after a private crime has been committed and pretend to go about bringing the wrongdoer to justice. But there would be no justice under anarchy, the critic declares. Such claims ignore the absence of real justice today in the state’s so-called criminal justice system, a machine for punishing people who have violated no one’s natural rights and dishing out arbitrary and senseless punishments through plea bargains extracted from hapless victims caught in the state’s unjust web of lies and arrogant pretense.

Of course, no sensible anarchist expects that the abolition of the state will create heaven on earth. Such an anarchist understands full well that even the best feasible form of human social organization will be vulnerable to any number of crimes and other wrongs — after all, we’re dealing with real flesh-and-blood human beings here. But under anarchy, voluntary cooperation, peace, and justice have, so to speak, at least a fighting chance, which is one helluva lot more than we can say about social life under state domination.

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‘Some Basics of State Domination and Public Submission’ in French

Thanks to Contrpoints for the French translation of Robert Higgs’s article that appeared here.

See: Les bases de la domination étatique et de la soumission populaire

Do You Remember the Sixties?

Visit_of_President_Johnson_in_VietnamDo you remember the Sixties? I do, vividly. The latter half of that decade was the worst time of my life so far as the enveloping social and political conditions were concerned: endless, horrifying war; unraveling civil rights movement; urban riots and violence; political assassinations and mass protests; university upheavals and bombings; police brutality at every turn; political leaders—the cosmically offensive LBJ above all, with Nixon a close second—so foul that one had to avert his eyes from their hideous visage and pinch his nose to keep out their stench of death and moral putrefaction.

Yet amid all of this social and political horror, the time was pervaded by a bizarre hopefulness, especially among young people. Caught up with one basis or another for optimism and personal commitment—New Leftism, anti-Establishmentism, communitarianism, hippy love-harmony, anti-militarism, anti-imperialism, and so on—many of us became convinced that the future would be better, that never again would we be fooled by the “new boss,” that in some fundamental way we were living through an irreversible revolution. Before long, of course, most of these youthful optimists ran off the rails into violence, drug-dazed escapism, abandonment of social engagement for more personal goal-seeking, and a thousand other forms of personal accommodation to the defeat of all attempts at sweeping societal transformation.

Thus, the new world we anticipated and worked to create never arrived, and so we went on to make our separate ways through a world that in its essentials remained the same as the old: war after war; political corruption that stinks to heaven’s heights; spiritual anxiety and rootlessness; fascination with culturally superficial and ephemeral foolishness.

We now have, of course, some things that we lacked then—personal computers, the Internet, the Web, and an abundance of electronic gizmos—and some of us fancy that these things will allow people to congeal in the creation of a truly better world. I have my doubts. The Establishment is stronger than ever: more pervasive and inescapable in its surveillance; more lethal and invasive in its police presence; more lavishly funded; stronger in its ability to lock hundreds of millions in helpless dependency; and no less ruthless than it was then. Against these immense forces of the Establishment, we can only send, at most, a few million mostly youthful optimists, unorganized and mutually quarrelsome, easily distracted by the vibrations of the latest tweet or twerk. This scenario is not a promising portent of genuine revolution. What I saw and experienced and participated in during the Sixties had much greater promise and, for a decade or so, much wider participation, yet it fizzled out, leaving only marginal changes for the better (the major exception being the elimination of the draft, which was truly important). The idea that today’s dissidents will have more success strikes me as the sheerest wishful thinking.

Also posted at The Beacon. 

The Unbroken-Leg Fallacy

Paris_Duty_who_works_for_the_Pocahontas_Corporation_at_the_Amonate_Mine,_received_a_broken_leg_in_mine_coal_car..._-_NARA_-_541091In recent years, many people, at least in certain circles, have become familiar with Bastiat’s broken-window fallacy and have come to recognize that Keynesian macroeconomic policy amounts to little more than this fallacy writ large.

Perhaps even more important is what we might call the unbroken-leg fallacy. This is the presumption, which underlies all sorts of state intervention, both macroeconomic and microeconomic, in the market system, that the participants in markets are perfectly capable of acting more productively but, owing to various “market failures,” are not doing so on their own and require state action to repair the situation. The fallacy is that this reasoning completely ignores the countless ways in which the state’s own intrusions and engagements in the economic system in effect “break the legs” of private-sector actors by distorting prices (including interest rates), penalizing productive actions, and subsidizing destructive actions. Having invaded the economic order like the proverbial bull in a China shop, the state’s kingpins, functionaries, and intellectual bootlickers then have the chutzpah to blame “market failures” for the wreckage they themselves have created — an ever-changing hodgepodge of bad incentives, misdirected state efforts, and ominous fears about further unsettling state actions to come.

Owing to the built-in feedback that occurs in a genuinely free, profit-and-loss-based market system, people do not systematically err and fail in their multifaceted efforts to coordinate their own economic activities — unless, that is, the state runs amok, breaking their legs willy-nilly and crippling the operation of the price system. Economic analysis and policy-making that disregard this reality rest on a fallacious foundation.

Some Basics of State Domination and Public Submission

51y+gUr59fL._SY344_BO1,204,203,200_Familiarity may indeed, as the saying goes, breed contempt, but it also breeds a sort of somnolence. People who have never known anything other than a certain state of affairs—even an extraordinarily problematic state of affairs—have a tendency not to notice it at all, to relate it, so to speak, as if they were sleepwalking through it. Such is the situation of modern people in relation to the state. They have always known it, and they take it completely for granted, regarding it as one might regard the weather: whether it brings rain or sunshine, lightning bolts or soothing spring breezes, it is always there, an aspect of nature itself. Even when it proves destructive, its destruction still qualifies as something akin to “acts of God.”

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Tolstoy’s Remarkable Manifesto on Christian Anarchy and Pacifism

225px-L.N.Tolstoy_Prokudin-GorskyI’ve just finished reading Leo Tolstoy’s remarkable book The Kingdom of God Is Within You. This was written in Russian and completed in 1893, but the Russian censors forbade its publication. It circulated in unpublished form in Russia, however, and was soon translated into other languages and published abroad. It had substantial influence on the course of history, perhaps most of all because of its influence on Gandhi.

The book is odd in several respects. In a purely literary sense, it is by no means a masterpiece, as Tolstoy’s great novels, written earlier in his life, were. In places it reads more like a set of notes for a book than as a polished work. For example, it contains many very long block quotations and much unnecessary repetition. However, Tolstoy’s mastery as a writer still shines in the brilliance of some of his formulations, especially in the second half of the book.

Odd, too, is Tolstoy’s own curiously uneven command of different aspects of his subject. In regard to the nature and operation of the state and the sociology of human interrelations in the socio-political order, Tolstoy’s clear-eyed insights cut to the quick. He makes even an analyst such as James Buchanan, who complained about people’s “romantic” views of politics and the state, seem utterly romantic. In contrast, Tolstoy’s understanding of economics was abysmal and leads him into foolish notions of the equivalence between state acts and capitalist acts. He seems also to have given no thought to what the consequences would be if his communistic preferences about the distribution of property were adopted in practice. Although he had excellent insights into the role of (what I call) ideology in the maintenance of the state-dominated social order, he entertained a view of how the dominant ideology was changing and would continue to change that seems to me completely lacking in contemporary evidence and utterly at variance with everything we now know about how ideology did change during the past century or so. He greatly overestimated the hold that Christian morality had on the souls of people in the West at the time he was writing, not to speak of later, even less Christian times.

Tolstoy is one of the most important Christian anarchists in history, yet his views on Christianity were anything but typical. For example, he regarded the various Christian churches as totally corrupt and as the propagators of false and spurious doctrines that only helped the dominant elites to retain their hold on political, social, and political power while oppressing the great mass of the people. Self-serving members of the upper crust were, in his eyes, willing to avert their eyes from the truth, especially the Truth of Christianity as expressed above all by the Sermon on the Mount. This sermon, indeed, seems to have amounted to not only the heart of Tolstoy’s Christianity, but to the bulk of it, as well. For him, Christianity was above all a commitment to love others as one’s self and to abstain from the use of force and violence, even in resistance to evil or in self-defense. Thus, as a Christian anarchist, he comes close to occupying a class of his own (though not quite all his own).

I plan to write at greater length about Tolstoy’s fascinating book for a future “Etceteras” feature in The Independent Review. Aside from its interest as a manifesto for Christian pacifism and anarchism, the book contains many anticipations of ideas later developed in economics and public choice, and it deserves much greater attention in these regards than it has previously received.

[Also posted at The Beacon.]

Did the US Provoke the Axis Powers?

758px-The_USS_Arizona_(BB-39)_burning_after_the_Japanese_attack_on_Pearl_Harbor_-_NARA_195617_-_EditIn her latest hit piece on the Mises Institute, WaPo’s Jennifer Rubin quotes a David Weigel hit piece on the Mises Institute in which Weigel attacks David Gordon and Ralph Raico for daring to criticize Winston Churchill.  The occasion for these remarks is a comment made by Rand Paul about American policy before 1941:

“There are times when sanctions have made it worse,” Paul said. “Leading up to World War II, we cut off trade with Japan. That probably caused Japan to react angrily. We also had a blockade on Germany after World War I that probably encouraged some of their anger.”

It’s not my job to defend Rand Paul, but as Weigel notes, these ideas are likely influenced by this article, and this article.

Rubin’s purpose in mentioning it is to imply that merely mentioning established facts about the pro-war behavior of the American regime prior to world War II somehow constitutes sympathy for the Axis powers. Such an assertion is nonsense, of course, since the Japanese and Nazi states are responsible for the actions of the Japanese and Nazi states. Pointing out that Roosevelt’s regime was doing everything it could to provoke a war with the Japanese, on the other hand, simply highlights the barbarity of the American state in putting its own citizens in danger and seeking a conflict that led to the placing of Japanese Americans in concentration camps, and the enslavement of millions of Americans through conscription. Reducing every conflict to a comic-book-like battle between good guys and bad guys, on the other hand, is just the sort of thing that people like Rubin live for.

For those who actually seek a more complete and detailed view of the lead-up to the Second World War, see Robert Higgs’s article based on this video:

Robert Higgs Discusses his book ‘Crisis and Leviathan’

Robert Higgs discusses his book ‘Crisis and Leviathan: Critical Episodes in the Growth of American Government’. Purchase online. 

Higgs: Looking Beyond the Unemployment Numbers

Robert Higgs, in spite of his reservations about writing op-eds, has written a great one for the McClatchy-Tribune wire:

One of the main reasons for containing our joy is that the rate fell from 7 percent in November despite the addition of just 74,000 net new jobs, a weak performance by any measure – and far below the 2013 monthly average of 182,000 new jobs. Another reason for caution is that the standard unemployment measure (U-3) provides a distorted picture of what’s taking place in the job market.

A better measure of the health of the job market is total employment: how many people have jobs. After all, it is employment that contributes to our well-being. Jobs, not unemployment, produce the goods, services and earnings that our families rely on. And on this front the picture is grim by historical standards, with 2 million fewer civilians working at the end of 2013 than at the end of 2007, when the economy began to tank.

But even this doesn’t tell the full story, because while the economy and job market have been struggling, the population has been growing. This means that a smaller percentage of the job-eligible civilian population – that is, non-institutionalized individuals age 16 and older – has jobs.