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Posts Tagged ‘Adam Smith’

Mercantilism: A Lesson for Our Times? | Mises Institute

Posted by M. C. on July 18, 2023

He concluded that the

“motive of all these regulations, is to extend our own manufactures, not by their own improvement, but by the depression of those of all our neighbors, and by putting an end, as much as possible, to the troublesome competition of such odious and disagreeable rivals.“

“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. … But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.“

https://mises.org/library/mercantilism-lesson-our-times

Murray N. Rothbard

Mercantilism has had a “good press” in recent decades, in contrast to 19th-century opinion. In the days of Adam Smith and the classical economists, mercantilism was properly regarded as a blend of economic fallacy and state creation of special privilege. But in our century, the general view of mercantilism has changed drastically: Keynesians hail mercantilists as prefiguring their own economic insights; Marxists, constitutionally unable to distinguish between free enterprise and special privilege, hail mercantilism as a “progressive” step in the historical development of capitalism; socialists and interventionists salute mercantilism as anticipating modern state building and central planning.

Mercantilism, which reached its height in the Europe of the 17th and 18th centuries, was a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state. Thus, mercantilism held that exports should be encouraged by the government and imports discouraged. Economically, this seems to be a tissue of fallacy; for what is the point of exports if not to purchase imports, and what is the point of piling up monetary bullion if the bullion is not used to purchase goods?

But mercantilism cannot be viewed satisfactorily as merely an exercise in economic theory. The mercantilist writers, indeed, did not consider themselves economic theorists, but practical men of affairs who argued and pamphleteered for specific economic policies, generally for policies which would subsidize activities or companies in which those writers were interested. Thus, a policy of favoring exports and penalizing imports had two important practical effects: it subsidized merchants and manufacturers engaged in the export trade, and it threw up a wall of privilege around inefficient manufacturers who formerly had to compete with foreign rivals. At the same time, the network of regulation and its enforcement built up the state bureaucracy as well as national and imperial power.

The famous English Navigation Acts, which played a leading role in provoking the American Revolution, are an excellent example of the structure and purpose of mercantilist regulation. The network of restriction greatly penalized Dutch and other European shippers, as well as American shipping and manufacturing, for the benefit of English merchants and manufacturers, whose competition was either outlawed or severely taxed and crippled. The use of the state to cripple or prohibit one’s competition is, in effect, the grant by the state of monopolistic privilege; and such was the effect for Englishmen engaged in the colonial trade.

A further consequence was the increase of tax revenue to build up the power and wealth of the English government, as well as the multiplying of the royal bureaucracy needed to administer and enforce the regulations and tax decrees. Thus, the English government, and certain English merchants and manufacturers, benefited from these mercantilist laws, while the losers included foreign merchants, American merchants and manufacturers, and, above all, the consumers of all lands, including England itself. The consumers lost, not only because of the specific distortions and restrictions on production of the various decrees, but also from the hampering of the international division of labor imposed by all the regulations.

Adam Smith’s Refutation

Mercantilism, then, was not simply an embodiment of theoretical fallacies; for the laws were only fallacies if we look at them from the point of view of the consumer, or of each individual in society. They are not fallacious if we realize that their aim was to confer special privilege and subsidy on favored groups; since subsidy and privilege can only be conferred by government at the expense of the remainder of its citizens, the fact that the bulk of the consumers lost in the process should occasion little surprise.1

Contrary to general opinion, the classical economists were not content merely to refute the fallacious economics of such mercantilist theories as bullionism or protectionism; they also were perfectly aware of the drive for special privilege that propelled the “mercantile system.” Thus, Adam Smith pointed to the fact that linen yarn could be imported into England duty free, whereas heavy import duties were levied on finished woven linen. The reason, as seen by Smith, was that the numerous English yarn spinners did not constitute a strong pressure group, whereas the master weavers were able to pressure the government to impose high duties on their product, while making sure that their raw material could be bought at as low a price as possible. He concluded that the

motive of all these regulations, is to extend our own manufactures, not by their own improvement, but by the depression of those of all our neighbors, and by putting an end, as much as possible, to the troublesome competition of such odious and disagreeable rivals.

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. … But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.

In the restraints upon the importation of all foreign commodities which can come into competition with those of our own growth, or manufacture, the interest of the home-consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter, that the former is obliged to pay that enhancement of price which this monopoly almost always occasions.

It is altogether for the benefit of the producer that bounties are granted upon the exportation of some of his productions. The home-consumer is obliged to pay, first, the tax which is necessary for paying the bounty, and secondly, the still greater tax which necessarily arises from enhancement of the price of the commodity in the home market.2

Before Keynes

Mercantilism was not only a policy of intricate government regulations; it was also a pre-Keynesian policy of inflation, of lowering interest rates artificially, and of increasing “effective demand” by heavy government spending and sponsorship of measures to increase the quantity of money. Like the Keynesians, the mercantilists thundered against “hoarding,” and urged the rapid circulation of money throughout the economy; furthermore, they habitually pointed to an alleged “scarcity of money” as the cause of depressed trade or unemployment.3 Thus, in a prefiguration of the Keynesian “multiplier,” William Potter, one of the first advocates of paper money in the Western world (1650), wrote:

The greater quantity … of money … the more commodity they sell, that is, the greater is their trade. For whatsoever is taken amongst men … though it were ten times more than now it is, yet if it be one way or other laid out by each man, as fast as he receives it … it doth occasion a quickness in the revolution of commodity from hand to hand … much more than proportional to such increase of money.4

And the German mercantilist F.W. von Schrötter wrote of the importance of money changing hands, for one person’s spending is another’s income; as money “pass[es] from one hand to another … the more useful it is to the country, for … the sustenance of so many people is multiplied,” and employment increased. Thrift, according to von Schrötter, causes unemployment, since saving withdraws money from circulation. And John Cary wrote that if everyone spent more, everyone would obtain larger incomes, and “might then live more plentifully.”5

Historians have had an unfortunate tendency to depict the mercantilists as inflationists and therefore as champions of the poor debtors, while the classical economists have been considered hardhearted apologists for the status quo and the established order. The truth was almost precisely the reverse. In the first place, inflation did not benefit the poor; wages habitually lagged behind the rise in prices during inflations, especially behind agricultural prices. Furthermore, the “debtors” were generally not the poor but large merchants and quasi-feudal landlords, and it was the landlords who benefited triply from inflation: from the habitually steep increases in food prices, from the lower interest rates and the lower purchasing power of money in their role as debtors, and from the particularly large increases in land values caused by the fall in interest rates. In fact, the English government and Parliament was heavily landlord dominated, and it is no coincidence that one of the main arguments of the mercantilist writers for inflation was that it would greatly raise the value of land.

Exploitation of Workers

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Seeing The Invisible Hand

Posted by M. C. on April 11, 2023

Thomas Sowell said it best when he averred: “It is hard to imagine a more stupid or dangerous way of making decisions that by putting those decisions in the hands of people who pay no penalty for being wrong.” He, too, is herein channeling the invisible hand.

Hint: don’t bet against the invisible hand. It is a losing proposition.

https://open.substack.com/pub/walterblock/p/seeing-the-invisible-hand?utm_source=share&utm_medium=android

Luis Rivera

By Walter E. Block

Adam Smith’s “invisible hand” is certainly the most wondrous, astounding and marvelous concept in all of economics, and there are quite a few doozies in the dismal science. I go further than that. The invisible hand ranks as high or higher, in terms of pure beauty, than even the smile of a baby, the music of Mozart or the most beautiful sunset that ever took place. In terms of what it means for our potential prosperity, it has no upper bounds whatsoever.

Bastiat perched himself on the top of the Eifel Tower, looked down at the people scurrying around far down below him, and marveled at the fact that Paris got fed, without any central direction at all. This was in invisible hand (that is, free enterprise) at work; you can’t see this “hand,” but you can discern its effects.

We all marvel at the teamwork of the championship basketball team, the winner of the eight-person shell in the regatta, a 100-member orchestra playing 64th notes without a hair’s breath of discord. But this pales into total insignificance compared to the teamwork made at least potentially possible by the invisible hand; all eight billion of us cooperating producing goods and services and thus fighting poverty. These other accomplishments have a coach, a coxswain or a conductor; in contrast, when the human race bans protectionism and regulation, the invisible hand will take over without any central direction at all. If that is not a miracle, then nothing is (Adam Smith thought that the invisible hand was God’s hand). If that does not at least slightly shake up the atheists of the world, then nothing will.

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TGIF: Racial Polarization Is Poison | The Libertarian Institute

Posted by M. C. on November 28, 2021

When social distrust is sown among groups, particularly on the basis of spurious identity considerations, a great deal of what we value but take for granted is put at risk. This doesn’t mean that America’s history of slavery, Jim Crow, and less formal forms of racism can’t be taught and discussed frankly. They must be.

https://libertarianinstitute.org/articles/tgif-racial-polarization-is-poison/

by Sheldon Richman

Be they “left” or “right,” those who agitate for racial polarization seem to have no sense of the harm they could do to everyone in our society. As the wise Glenn Loury would say, they are playing with fire. By polarization, of any kind, I mean more than merely a vigorous disagreement over issues or even basic principles. That’s fine. Rather, I mean something dogmatic, obsessive, and fanatical, in which virtually everything in the world is seen through a single lens and everyone is expected to act and speak in a certain way, with stern consequences for the noncompliant.

It can happen in politics, but it is becoming especially common with race, where some would have us interpret virtually everything through a racial prism. This is more than simply unfortunate; it threatens what the ancient Greek philosophers and later philosophers such as Spinoza — whose 389th birthday (Nov. 24, 1632) we marked this week — held to be the good life for human beings; it’s the conception of life in which being virtuous is seen as constitutive of happiness, or better: eudaimonia, and not separate from happiness or merely means to it.

Racial polarization threatens this not just in the obvious way, namely, with the potential holds for violence. I’m thinking of the more subtle way: through the narrowing and undermining of all sorts of social cooperation.

Formulators of the original (classical) liberalism, which has been refined into the libertarian political philosophy, took to heart what the Greeks and their intellectual descendants emphasized, namely, that we human beings are inherently social animals. Some went even further to note that, as reason- and language-bearing creatures, we thrive best when surrounded by people who exhibit their rationality in the fullest sense, not only as a tool to judge means but ends as well. Only in such a milieu can we live in ways most proper to rational animals, that is, with reason always in the driver’s seat. This entails, among other things, dealing with people through argument, persuasion, and consent rather than command, manipulation, and force.

A key way that social existence promotes individual flourishing is cooperation, which augments our otherwise weak individual capacities. While no collective brain exists, liberal society creates something analogous to it. As a result, we each gain access to an incredible volume of knowledge — moral and otherwise — any morsel of which we might never have thought up or encountered while living alone or in small groups during our limited lifespans. The marketplace of ideas is an example of this process that benefits us all beyond measure. In this day when free speech and free inquiry are increasingly under assault from reckless elements left and right, this would be good to remember.

The benefits of the broadest possible social cooperation are also abundant in the material realm. The early liberal political-economic thought demonstrated that living in isolation was to live in abject poverty. No one was better at pointing this out than Frédéric Bastiat, the 19th-century French liberal. In the opening chapter of his unfinished magnum opus, Economic Harmonies, he wrote:

It is impossible not to be struck by the disproportion, truly incommensurable, that exists between the satisfactions [any] man derives from society and the satisfactions that he could provide for himself if he were reduced to his own resources. I make bold to say that in one day he consumes more things than he could produce himself in ten centuries.

What makes the phenomenon stranger still is that the same thing holds true for all other men. Every one of the members of society has consumed a million times more than he could have produced; yet no one has robbed anyone else….

We should be shutting our eyes to the facts if we refused to recognize that society cannot present such complicated combinations in which civil and criminal law play so little part without being subject to a prodigiously ingenious mechanism. This mechanism is the object of study of political economy.

If this was true in 1850, what would Bastiat say about our time? Think of all the things we have access to in the developed world, even those of modest means. (The people of the developing world want the same, which shows the cruelty of so-called climate policy, which would raise the price and reliability of energy.) The point which shouts from Bastiat’s passages is that we have much to lose if social cooperation were to break down or even narrowed. Society is exchange, as the liberals hammered home on many occasions. “Society is concerted action, cooperation,” Ludwig von Mises wrote in his grand treatise, Human Action, which he was tempted to call Social Cooperation, another name for specialization through the division of labor and knowledge.

Need more be said about the threat from racial and other deep polarization? To invoke another original liberal, Adam Smith famously wrote that the division of labor is limited by the extent of the market. The fewer the people with whom to cooperate, the more primitive the division of labor. And the more primitive the division of labor, the poorer we are. That should require no elaboration.

When social distrust is sown among groups, particularly on the basis of spurious identity considerations, a great deal of what we value but take for granted is put at risk. This doesn’t mean that America’s history of slavery, Jim Crow, and less formal forms of racism can’t be taught and discussed frankly. They must be. But the cost will be unspeakably severe if frank conversation about the past and even aspects of the present transmogrify into polarization, hatred, and distrust.

Good people everywhere should speak out against polarization. Think about what we all have to lose. And once it’s lost, there may be no getting it back.

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Opposition Builds to the F-35 Program’s Runaway Costs | Mises Wire

Posted by M. C. on March 25, 2021

https://mises.org/wire/opposition-builds-f-35-programs-runaway-costs

David Kamioner

Earlier this month, House Armed Services Committee chairman Adam Smith (D-WA) said it’s time to “cut our losses” on the F-35 Joint Strike Fighter, and added, “I want to stop throwing money down that particular rathole.”

Smith has no problem with spending money on air power as an essential component of military defense. But when it comes to the extremely expensive F-35 program, he asks “What does the F-35 give us and is there a way to cut our losses? … For what we have spent in terms of what we’ve gotten back? It’s just painful. It just hurts.”

Smith, who will sherpa the defense authorization bill, wants to make changes in the program. “[We] can’t get rid of the program. I do understand that. What I’m going to try to do is figure out how we can get a mix of fighter attack aircraft that’s the most cost-effective. Bottom line. And I’m telling you right now a big part of that is finding something that doesn’t make us have to rely on the F-35 for the next 35 years.”

The program has technical issues that come close to making it nonviable. In my own past research, I found the aircraft has major issues with reliability and that puts the service life of the airplane considerably below first reports. For example, the US Marines bought the F-35B variant. It was advertised to have an eight thousand–hour service life. Realistically it now appears that it will be closer to twenty-one hundred. Maintenance? The goal of hitting 80 percent of field metrics standards is not being met. Known cyber issues with the plane remain unresolved. There are myriad other problems both large and small with the F-35.

In American Greatness, defense analyst Mytheos Holt commented,

[T]he F-35 also has a software component. It’s called the ALIS logistical system, an entire software infrastructure that is supposed to make the plane easier to fly and maintain. In reality, according to former Air Force Secretary Heather Wilson, ALIS is a buggy mess, a system “so frustrating to use, maintainers said they were wasting 10–15 hours a week fighting with it.” It has also been shown to be extremely vulnerable to hackers when it does work.

In other words, it’s the defense industry’s equivalent of Windows 10, if it was programmed in the Ninth Circle of Hell. Lockheed Martin claims that even though the Defense Department paid for ALIS, it still has to license the technology from the company. Given that ALIS in its current state is glorified malware, this might not seem like a big deal. But it is. Because one of the things Lockheed Martin has been using its ownership of ALIS to do is prevent the U.S. government from fixing the software on its own. In other words, the Pentagon can’t use its own planes unless Lockheed feels like fixing the problem with the software.

This is bad enough, but it gets worse when you imagine that ALIS actually worked as advertised. In that situation, Lockheed arguably could refuse to license the F-35s to anyone they like, for any reason.

Yes, the planes American taxpayers spent $1 trillion to build might not even be ours, thanks to a quirk of intellectual property law.

It gets even worse. Apparently, even when US government documents get uploaded into ALIS, they come back with Lockheed Martin’s proprietary markings. In other words, Lockheed is trying to assert ownership not just over ALIS, but also over the data that is fed into it.

One does not have to be a libertarian purist to have issues with such a program. Competent analysts know that the military has traditionally been slow to embrace new technology, despite having the largest research and development budget on the planet. Especially when it comes to communications, the armed services can lag far behind the private sector. In the 1980s, during my army service, the military had progressed from walkie-talkies and bulkier longer-range communications systems like the PRC-77 to rudimentary software. In the artillery, the TacFire system was used for targeting and, given the mission, communication of data.

Over the decades military progress shadowed private sector initiative, though usually a step or two behind. As, over the past several years, the armed forces have used Zoom for communications, the market has advanced beyond that standard to more sophisticated software. An example of that improvement is Kumospace, a state-of-the-art comms tool. Comparable to its peers like Zoom, but significantly more cutting edge, Kumospace leads the field in video chat, group chat, virtual interview, and remote work functions. As a military veteran I can tell you: those aspects of military communications can not only enhance capabilities to carry out peacetime operations, but also could spell the difference between life and death in a wartime environment. Author:

David Kamioner

David Kamioner is a veteran of US Army Intelligence and has spent decades in political operations, non-profits, and education. His work has been featured in Real Clear Policy. He is currently a Contributing Editor at LifeZette and regularly writes for other publications as well.

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The First Socialists: The Saint-Simonians and the Utopians | Mises Wire

Posted by M. C. on July 14, 2020

https://mises.org/wire/first-socialists-saint-simonians-and-utopians?utm_source=Mises+Institute+Subscriptions&utm_campaign=bdca1e02ca-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-bdca1e02ca-228343965

At the turn of the nineteenth century, classical economics—as represented by Adam Smith in Britain and Jean-Baptiste Say in France—seemed unassailable. The American Revolution, to many people, demonstrated the failures of the old economic order of mercantilism and colonialism. The flourishing trade after the war proved protective tariffs useless, and the rise of industrial production encouraged the expansion of trade networks. Smith and his acolytes seemed proven right in their calls for free trade and economic competition.

Industrialization ushered in rapid increases in national productivity and, with it, the uncomfortable disruption of traditional ways of life. In 1815, English manufacturers had a surplus of stockpiled goods that they could not export during the War of 1812, forcing them to reduce production and lay off workers. The concept of unemployment was effectively unknown at this time, and displaced workers—following the 1811 example of Ned Lud and his Luddites—rioted and destroyed the industrial machines they blamed for their misery. In 1825, following a period of significant credit expansion, the market crashed, leading to the collapse of dozens of provincial banks. People began to question whether there were yet undiscovered flaws in the new economic system of industrialization and free trade.

Among the thinkers who developed an interest in these “commercial crises,” as he called them, was Simonde de Sismondi, a follower of Smith and Say. After observing the early economic crises in Europe, Sismondi began to question the prevailing economic doctrine. Although he did not become a socialist, strictly speaking, his critiques of laissez-faire laid the foundation for various socialist doctrines that would be developed later.

Sismondi began with a critique of the classical method. He offered the earliest criticism of David Ricardo’s abstract deductive method. Anticipating the German historical school, Sismondi argued that economics should be studied in historical and political context, that the consequences of government policies may vary according to time and place. Rejecting Ricardo’s use of Robinson Crusoe to derive the laws of human nature (a theoretical and pedagogical tool that survives today exclusively in Austrian economics), Sismondi believed that the study of isolated man was inadequate for understanding a complex industrial society.

With his new methodological approach, Sismondi took shots at two sacred concepts of classical theory: individual self-interest and free competition. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,” Adam Smith famously wrote, “but from their regard to their own interest.” Sismondi agreed, but he believed Smith erred in only applying the concept of self-interest to production, without considering the distribution of property. Industrialization produced new economic classes, the proletariat (those who work) and the capitalist (those who possess). Free competition compelled capitalists to produce cheaper goods, but it also required workers to compete with each other for employment. Because lower labor costs meant cheaper goods, the interests of the capitalist and the wage worker were in conflict.

The classical economists celebrated the increase in production that self-interest and competition engendered, but Sismondi argued that the conflict between individual interests and the “general interest” of society yielded overproduction, which was the cause of economic crises. Free competition encouraged constant downward pressure on wages, as workers underbid each other for employment and producers constantly worked to lower the cost of production. As some capitalists drove their competitors out of business, former capitalists would join the ranks of the nonpropertied proletariat, and capital would concentrate in the hands of a dwindling number of property owners. To cure these ills, Sismondi called for state intervention—anathema to advocates of laissez-faire—to constrain competition and regulate labor.

Although Sismondi did not call for the abolition of private property, and therefore was not a socialist, his ideas offer the first expression of several concepts that would prove integral to socialist thinkers later in the century. The first is his notion that society had a collective, or “general,” interest that differed from the individual interests of its members. Second, he is the first expositor of the fallacy eventually named the “iron law of wages”—the idea that free competition will suppress wages to subsistence levels. He also formulated a class theory of the proletariat and the capitalist. Related to this was the “law of concentration” that would prove so integral to Marxism. Finally, Sismondi introduced the idea of labor legislation, which was the first modern reaction against laissez-faire absolutism. Although Sismondi’s proposed interventions were modest by modern standards, he opened the door for new ideas about the state’s function and duties that could logically be extended ad infinitum.

In addition to Sismondi, another thinker working at roughly the same time gave birth to other key elements of socialist theory. Henri de Saint-Simon is often considered the father of socialism, though it was his followers who truly produced the first formal socialist doctrine. One of them, Pierre Leroux, apparently even coined the term “socialism” to describe their system.

Saint-Simon had something of a messiah complex, and what he founded was less of an economic theory than a religious cult. A child of the Enlightenment, he was fascinated by Newton’s law of gravity, which Saint-Simon held as the single “universal law” from which all truths—material and spiritual—could be deduced. If God is the center of the universe, gravity was the “law of God,” that governed all phenomena. Saint-Simon believed that the purpose of religion was to direct the masses toward the improvement of society. Christian leadership had served this function before industrialization, but Saint-Simon—after God spoke to him in a vision—called for replacing the antiquated Christian clergy with a “Council of Newton,” consisting of experts from various fields of science.

If Newton was God’s prophet for physics, Saint-Simon was the prophet for the social sciences. Anticipating the positivists, he thought that the empirical method of physics should be adopted for the study of man. By observing the past, social scientists should be able to anticipate the future, thus allowing them to scientifically derive the best political policies. Saint-Simon also theorized that society would progress through specific stages of development. Although a predictive philosophy of history was nothing new—the Christian philosophy of history had long held such a view in anticipation of the return of Christ—Marx, among other socialists, would adopt a similar stages doctrine of history to argue the inevitability of socialism.

Unlike Sismondi, Saint-Simon was an apologist for industrialization. As industrialization expanded, all classes would disappear until society was left with only workers and idlers. Although this seems similar to Sismondi’s proletariat-capitalist distinction, Saint-Simon’s “idlers” were not the capitalists but the landowners of the feudal past. Eventually, they would disappear, and the world would consist only of workers. Related to this, Saint-Simon criticized property, by which he specifically meant landed property. Society under the new system should be modeled after the factory, operating as a “national association,” and the state’s function should be limited to protecting workers from the indolent and securing the freedom of producers.

The genuine socialism of Saint-Simonianism came from the modified doctrine espoused by his acolytes. Saint-Simon criticized the privilege of feudal landlords—his idlers—but his followers extended this logic to the owners of capital. Private property in capital, even more than land, privileged capitalists at the expense of the workers. Land and capital are both tools of production, so there was no need to distinguish between the landlord and the capitalist; both were idlers, the Saint-Simonians said: the capitalist earned interest just as the landlord earned rent. Thus, the new worker-idler dichotomy more closely resembled the proletariat-capitalist model of Sismondi. With industrialization, workers were exploited by the capitalists just as serfs were exploited by landlords.

The Saint-Simonians thus established the first formal doctrine of socialism (though socialistic ideas have existed since at least the ancient Greeks).

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“Libertarian” Is Just Another Word for (Classical) Liberal | Mises Wire

Posted by M. C. on September 16, 2019

https://mises.org/wire/libertarian-just-another-word-classical-liberal

Long post…

But rest assured, Lew Rockwell reminds us, things could be far worse “were it not for the efforts of a relative handful of intellectuals who have fought against socialist theory for more than a century. It might have been 99% in support of socialist tyranny. So there is no sense in saying that these intellectual efforts are wasted.”

Moreover, the success of liberalism is demonstrated in the fact that non-liberals have long attempted to steal the mantle of liberalism for themselves. In the English speaking world, it is no mere accident of history that social democrats and other non-liberal groups often insist on calling themselves liberal. The effort to expropriate the term “liberal” in the twentieth century was a matter of political expediency. Liberalism was a popular and influential ideology throughout the nineteenth and early twentieth century. So it only made sense to attempt to apply the term to non-liberal ideologies and coast on liberalism’s past success.3

Today, we continue to see the legacy of liberalism worldwide in discussions over human rights, in efforts to increase freedom in trade, and greater autonomy from state intervention.  The fact that socialists and other types of interventionists win victories proves nothing about the irrelevance of liberalism. They only remind us how much worse things would be were it not for liberalism’s occasional successes. Moreover, efforts by governments to co-opt liberal vocabulary for purposes of building state power are to be expected. We see this often in the call for government managed “human rights” efforts and in calls for globally managed “free trade.” These measures aren’t liberal, but governments know saying liberal things and professing to pursue liberal goals makes for great PR.

Meanwhile, the answer to gains made by social democrats and socialists lies in strengthening the intellectual movement that is liberalism, which over time translates into political action. If liberalism is eclipsed today by other ideologies, the fault lies with us who have done too little, and with the defeatists who declare intellectual fights to be irrelevant to real life, or not worth the trouble.

Liberalism — that is libertarianism — has a long and impressive history that is all too often neglected. But it is, as Raico contended, an indispensable part of “our own civilization.” We’d do well to know more about its history.

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Difference Between Classic Liberalism & Progressivism Defined

 

 

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How College Profs Push Students to Socialism | Mises Wire

Posted by M. C. on May 11, 2019

The true aim of these “scholar activists,” as many academics have begun calling themselves, is to propagate socialism by redefining capitalism to encompass every evil of human history.

https://mises.org/wire/how-college-profs-push-students-socialism

After the collapse of the housing market in 2008, professional historians gave birth to a new sub-field of history usually referred to as “the new history of capitalism.” Economic history is hardly novel, but the new history of capitalism takes the approach that capitalism is the “thing” that needs to be explained. In the past decade, this field has become one of the most fashionable trends in the history profession, with centers for the study of capitalism being established at Cornell and the University of Georgia.

Predictably, the scholarship that falls under this label is replete with problems. Most self-described “historians of capitalism” know nothing of economic theory even as they try to incorporate it into their writings. Seth Rockman, from Brown University, for instance, supports his analysis of antebellum Baltimore by quoting Adam Smith’s exposition of the labor theory of value. Rockman seems to be taking a sly shot at proponents of capitalism—“even your precious Adam Smith believes labor is the source of value”—but he appears to be entirely unaware that economists abandoned the labor theory of value more than a century ago.1

These historians have also uniformly accepted that slavery and capitalism are inextricably linked. This idea has been around since at least 1944, when the Marxist historian Eric Williams published Capitalism and Slavery, arguing that British industrialization depended on the slave economy of Barbados.2 But the idea has evolved to the point that historians have established a consensus on claims that defy empirical substantiation… Read the rest of this entry »

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The Reasons Behind The Relentless Ideological Onslaught – LewRockwell

Posted by M. C. on April 5, 2019

https://www.lewrockwell.com/2019/04/no_author/the-reasons-behind-the-relentless-ideological-onslaught-against-free-markets/

By Brandon Smith
Alt-Market.com

…The suppression of free markets began in the aftermath of the Civil War and the passage of the 14th Amendment, which was intended to protect the citizenship rights of former slaves, but was instead used as a legal loophole by the elite to establish what we now know as “corporations”.

Corporations are defined by their corporate charter, which is granted by the government, as well as their “corporate personhood” derived from the exploitation of the 14th Amendment. Corporate personhood allowed for limited liability as well as many other government protections. Unlike partnerships, leaders of corporations cannot be prosecuted for many crimes if those crimes were executed by “the company”. The company can be sued as a “legal person” in civil court, or fined by the government, but in general CEO’s and major shareholders are protected from any consequences even if they were directly involved in the commission of a crime.

This relationship between government and corporations has become so egregious that today these monopolies receive special legal protections and immunity from some civil lawsuits, aid in the form of taxpayer funded welfare, massive tax cuts which smaller businesses and less connected corporations do not enjoy, and even central bank bailouts which keep them afloat. Major corporations are not allowed to fail, and no one is allowed to compete with them on a level playing field.

This is the exact antithesis to free markets. This is socialism. Yet many socialists point the finger at free market “capitalism” as the source of all our economic problems. This is impossible, because free markets on a level any higher than local trade do not exist today and have not existed for at least a century…

There is a group of people that do behave in a destructive way automatically or instinctually when engaging in commerce without regulation, and these people have become a fascination of mine. They are narcissistic sociopaths; the defining characteristic of most financial and political elites.

I have outlined the facts surrounding narcissistic sociopaths in numerous articles, and I recommend readers study these for greater details. To summarize, full blown narcissistic sociopathy is a psychological aberration present in around 1% of any given population from birth. That is to say, in most cases these people are not created by their environment. Many of them come from very balanced and sheltered childhoods. They are born the way they are.

Narcissistic sociopaths are a tiny portion of the population, but lacking any sense of empathy or conscience, they account for a vast percentage of all crimes committed in society. They also gravitate to positions of power and influence from the business world to politics…

I agree with Adam Smith in the idea that normal citizens will act to pursue success, but also to pursue balance. When given the opportunity to actually function within a true free market, most people are not going to destroy their surrounding environment and resources in some mad dash for gain. Why? Because it is in their self-interest not to. They know that if they abuse the structures around them they will lose their source of commerce. They know that if they ruin the system for others that they will be shunned in business. They also know that if they fail in such a spectacular manner and commit criminal sabotage of the free market system they will have to suffer the regret and shame that will follow.

The only factor that this does not apply to are the elites themselves; the narcissistic sociopaths devoid of conscience with whom we now contend for our freedoms. I would suggest that Smith’s free markets, unshackled from centralization and government interference, would function almost perfectly if these people were cut from the equation entirely.

Be seeing you

What is free market? definition and meaning ...

 

 

 

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Why the “Golden Rule” Is an Obstacle to the Government’s Agenda | Mises Wire

Posted by M. C. on February 23, 2019

https://mises.org/wire/why-golden-rule-obstacle-governments-agenda

The golden rule—“Do to others as you would have them do to you” being the most common variant I have heard–may be the most common ethical touchstone for human interactions. After all, Simon Blackburn wrote in his 2001 book, Ethics, that the Golden Rule is “found in some form in almost every ethical tradition.” I doubt there is anyone I know who has not heard of it. And I have often heard it used as the gold standard for behavior, applied to individuals, groups and governments.

However, fewer seem familiar with the silver rule, which is the converse of the golden rule—“do not do unto others what you would not have them do unto you”—even though it has been expressed in far more ways in various religious and ethical traditions. What it instructs us not to do has included “what you would not choose for yourself,” “what you do not want to happen to you,” what would anger if done to you by others,” “what you yourself dislike,” “that which is hateful to you,” “that which one regards as injurious to oneself,” and “that which is unfavorable to us,” among others, presenting a more thorough delineation of what not to do than the golden rule provides for what to do.

The silver rule follows the traditional definition of justice—giving each his own. It is reflected by Adam Smith, in his Theory of Moral Sentiments, where he writes “We can often fulfill all the rules of justice by sitting still and doing nothing.” That leaves it below the golden rule on most people’s ethical medal stands, because it seems to hold us to a higher standard. That is true when we are talking about individuals and voluntary associations but when we are talking about governments, the silver rule takes the gold.

When we are considering individuals, the golden rule need not conflict with the silver rule. You and I are each free to go beyond doing nothing harmful to others and do as much good unto them as we choose, using our own resources.

When we come to government, however, the golden rule, as commonly understood, conflicts with the silver rule. Read the rest of this entry »

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