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What libertarianism has become and will become — State Capacity Libertarianism

Posted by M. C. on March 25, 2020

The comments in the linked article are as enlightening or in the case of the post itself-entertaining- as the post.

https://marginalrevolution.com/marginalrevolution/2020/01/what-libertarianism-has-become-and-will-become-state-capacity-libertarianism.html

by  Tyler Cowen

Having tracked the libertarian “movement” for much of my life, I believe it is now pretty much hollowed out, at least in terms of flow.  One branch split off into Ron Paul-ism and less savory alt right directions, and another, more establishment branch remains out there in force but not really commanding new adherents.  For one thing, it doesn’t seem that old-style libertarianism can solve or even very well address a number of major problems, most significantly climate change.  For another, smart people are on the internet, and the internet seems to encourage synthetic and eclectic views, at least among the smart and curious.  Unlike the mass culture of the 1970s, it does not tend to breed “capital L Libertarianism.”  On top of all that, the out-migration from narrowly libertarian views has been severe, most of all from educated women.

There is also the word “classical liberal,” but what is “classical” supposed to mean that is not question-begging?  The classical liberalism of its time focused on 19th century problems — appropriate for the 19th century of course — but from WWII onwards it has been a very different ballgame.

Along the way, I believe the smart classical liberals and libertarians have, as if guided by an invisible hand, evolved into a view that I dub with the entirely non-sticky name of State Capacity Libertarianism.  I define State Capacity Libertarianism in terms of a number of propositions:

1. Markets and capitalism are very powerful, give them their due.

2. Earlier in history, a strong state was necessary to back the formation of capitalism and also to protect individual rights (do read Koyama and Johnson on state capacity).  Strong states remain necessary to maintain and extend capitalism and markets.  This includes keeping China at bay abroad and keeping elections free from foreign interference, as well as developing effective laws and regulations for intangible capital, intellectual property, and the new world of the internet.  (If you’ve read my other works, you will know this is not a call for massive regulation of Big Tech.)

3. A strong state is distinct from a very large or tyrannical state.  A good strong state should see the maintenance and extension of capitalism as one of its primary duties, in many cases its #1 duty.

4. Rapid increases in state capacity can be very dangerous (earlier Japan, Germany), but high levels of state capacity are not inherently tyrannical.  Denmark should in fact have a smaller government, but it is still one of the freer and more secure places in the world, at least for Danish citizens albeit not for everybody.

5. Many of the failures of today’s America are failures of excess regulation, but many others are failures of state capacity.  Our governments cannot address climate change, much improve K-12 education, fix traffic congestion, or improve the quality of their discretionary spending.  Much of our physical infrastructure is stagnant or declining in quality.  I favor much more immigration, nonetheless I think our government needs clear standards for who cannot get in, who will be forced to leave, and a workable court system to back all that up and today we do not have that either.

Those problems require state capacity — albeit to boost markets — in a way that classical libertarianism is poorly suited to deal with.  Furthermore, libertarianism is parasitic upon State Capacity Libertarianism to some degree.  For instance, even if you favor education privatization, in the shorter run we still need to make the current system much better.  That would even make privatization easier, if that is your goal.

6. I will cite again the philosophical framework of my book Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals.

7. The fundamental growth experience of recent decades has been the rise of capitalism, markets, and high living standards in East Asia, and State Capacity Libertarianism has no problem or embarrassment in endorsing those developments.  It remains the case that such progress (or better) could have been made with more markets and less government.  Still, state capacity had to grow in those countries and indeed it did.  Public health improvements are another major success story of our time, and those have relied heavily on state capacity — let’s just admit it.

8. The major problem areas of our time have been Africa and South Asia.  They are both lacking in markets and also in state capacity.

9. State Capacity Libertarians are more likely to have positive views of infrastructure, science subsidies, nuclear power (requires state support!), and space programs than are mainstream libertarians or modern Democrats.  Modern Democrats often claim to favor those items, and sincerely in my view, but de facto they are very willing to sacrifice them for redistribution, egalitarian and fairness concerns, mood affiliation, and serving traditional Democratic interest groups.  For instance, modern Democrats have run New York for some time now, and they’ve done a terrible job building and fixing things.  Nor are Democrats doing much to boost nuclear power as a partial solution to climate change, if anything the contrary.

10. State Capacity Libertarianism has no problem endorsing higher quality government and governance, whereas traditional libertarianism is more likely to embrace or at least be wishy-washy toward small, corrupt regimes, due to some of the residual liberties they leave behind.

11. State Capacity Libertarianism is not non-interventionist in foreign policy, as it believes in strong alliances with other relatively free nations, when feasible.  That said, the usual libertarian “problems of intervention because government makes a lot of mistakes” bar still should be applied to specific military actions.  But the alliances can be hugely beneficial, as illustrated by much of 20th century foreign policy and today much of Asia — which still relies on Pax Americana.

It is interesting to contrast State Capacity Libertarianism to liberaltarianism, another offshoot of libertarianism.  On most substantive issues, the liberaltarians might be very close to State Capacity Libertarians.  But emphasis and focus really matter, and I would offer this (partial) list of differences:

a. The liberaltarian starts by assuring “the left” that they favor lots of government transfer programs.  The State Capacity Libertarian recognizes that demands of mercy are never ending, that economic growth can benefit people more than transfers, and, within the governmental sphere, it is willing to emphasize an analytical, “cold-hearted” comparison between government discretionary spending and transfer spending.  Discretionary spending might well win out at many margins.

b. The “polarizing Left” is explicitly opposed to a lot of capitalism, and de facto standing in opposition to state capacity, due to the polarization, which tends to thwart problem-solving.  The polarizing Left is thus a bigger villain for State Capacity Libertarianism than it is for liberaltarianism.  For the liberaltarians, temporary alliances with the polarizing Left are possible because both oppose Trump and other bad elements of the right wing.  It is easy — maybe too easy — to market liberaltarianism to the Left as a critique and revision of libertarians and conservatives.

c. Liberaltarian Will Wilkinson made the mistake of expressing enthusiasm for Elizabeth Warren.  It is hard to imagine a State Capacity Libertarian making this same mistake, since so much of Warren’s energy is directed toward tearing down American business.  Ban fracking? Really?  Send money to Russia, Saudi Arabia, lose American jobs, and make climate change worse, all at the same time?  Nope.

d. State Capacity Libertarianism is more likely to make a mistake of say endorsing high-speed rail from LA to Sf (if indeed that is a mistake), and decrying the ability of U.S. governments to get such a thing done.  “Which mistakes they are most likely to commit” is an underrated way of assessing political philosophies.

You will note the influence of Peter Thiel on State Capacity Libertarianism, though I have never heard him frame the issues in this way.

Furthermore, “which ideas survive well in internet debate” has been an important filter on the evolution of the doctrine.  That point is under-discussed, for all sorts of issues, and it may get a blog post of its own.

Here is my earlier essay on the paradox of libertarianism, relevant for background.

Happy New Year everyone!

Be seeing you

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This Martial Law Will End, and End Badly

Posted by M. C. on March 22, 2020

The plebes – to their credit – know intuitively the economic reality which dictates there is no bottom in a market economy based upon closing the markets. Thus, they knew they had better stock up on food, guns and other necessities. And it will be bad: Great Depression-level bad. Last week, Tyler Cowen of George Mason University rather off-handedly posited that if current policy is maintained until August, the result would be 20 percent unemployment – not for months – but for years. 

There are now two kinds of people in the world: 1. Those who believe the Democratic candidates for President, and 2. Adults. There’s no going back to the old economy or old jobs, and Biden and Sanders are both knowingly lying to you.

https://libertarianinstitute.org/articles/this-martial-law-will-end-and-end-badly/

by

First, let’s get the three principles for the post-COVID-19 world out there:

  1. If you think COVID-19 is fake, or not really scary, you don’t know science and are an ignorant person.
  2. If you post cavalierly about frolicking socially with your friends, you have no empathy for the elderly and other vulnerable populations and are a horrible person.
  3. If you think we only had two options to fight COVID-19 – “A. Destroy the economy, or B. Grandma dies.” – you are sheeple-level stupid, and the media programming has brainwashed you. There were options C, D, E and F.

Now that I’ve offended everyone on social media, let’s talk about that last principle, which also happens to be the one no one in the media or Washington wants you to talk about. Politicians and their media spokesliars call their policy “social distancing,” but that’s just the political marketing angle for an economic and social shutdown we’ve always called martial law.

The other options could have included a two-stage isolation of the infected and separately isolating the vulnerable elderly and immuno-compromised populations. The latter self-isolate in their own communities in many cases anyway. For those that don’t already self-isolate, all those empty hotel rooms today could have provided sanctuary, or the federal government could have cleared out all those ICE detention centers and welcomed boomers into them. Today’s closed casinos – already famous for feting seniors – could also have become a refuge for the oxygen-tank-and-walker set.

Moreover, Trump using his bully-pulpit to call for greater ICU capacity to accommodate COVID-19 cases would have been helpful. The pandemics of a century ago – polio, the Spanish flu, smallpox and cholera outbreaks – should have provided historical clues that increasing hospital capacity is key. The data thus far from Italy and China shows COVID-19 has taxed the capacities of hospitals, as the elderly and the younger with pre-existing conditions need hospitalization many multiples more frequently than the regular flu virus.

The unfolding disaster of martial law

The plebes – to their credit – know intuitively the economic reality which dictates there is no bottom in a market economy based upon closing the markets. Thus, they knew they had better stock up on food, guns and other necessities. And it will be bad: Great Depression-level bad. Last week, Tyler Cowen of George Mason University rather off-handedly posited that if current policy is maintained until August, the result would be 20 percent unemployment – not for months – but for years.

This false choice of “a new great depression or grandma and two million more dies” has already aged worse than a dead tuna on a hot summer day, so it shouldn’t be a surprise the Trump administration has already pulled lead on suppressing the dire jobs numbers. It will only stink more as time goes on. But that doesn’t mean people with a brain stem no more complex than a box jellyfish won’t defend the martial law status quo. I turned on Fox News the other night to hear that twit Sean Hannity agree with Sen. Lindsay Graham’s call for the federal government to – not end the closure of markets – but reimburse wages for people being prevented by federal and state mandates from producing the goods and services we all want.  Meanwhile, Mitt Romney and Donald Trump have embraced Andrew Yang’s UBI platitude. With what money, neither pair said. Nor did they have to; there isn’t any money in a federal government already running a $1 trillion deficit whose tax revenue income source is about to hit the far slope of K2. So much for “conservative” small government principles. All politicians and mass media corporate whores are Keynesians now.

Democrats never pretended to have small government principles, but Joe Biden and Bernie Sanders likewise opted to cynically lie to the American people in the most recent Democratic debate rather than tell inconvenient truths. Biden claimed of people who have lost income to the virus shutdown: “We can make them whole now, now, and put in process a system whereby they all are made whole.” Sanders also deployed nearly identical language: “We have got to say to the American people, if you lose your job, you will be made whole.”

There are now two kinds of people in the world: 1. Those who believe the Democratic candidates for President, and 2. Adults. There’s no going back to the old economy or old jobs, and Biden and Sanders are both knowingly lying to you.

But the above at least confirms we will never have any relief from the politicians of either party in Washington or the establishment corporate media.

If working Americans want an end to the looming great depression, they’ve got to rise up in a revolution and end it themselves. Expect the stock market to lose a minimum of 5-10% per week and the effective unemployment rate (the unemployed plus furloughed employees no longer receiving a check) to increase 2% per week until that revolution happens. Much of that effective unemployment – maybe even half – will be permanent once the shutdowns are lifted, as leveraged or marginal firms shutter after accumulated fixed costs and no revenue make re-openings impossible.

The end of martial law will come, as the status quo becomes increasingly unbearable and a new Great Depression emerges. I’m convinced the workers will rise up, even if “social distancing” does make protests and riots more difficult. And the riots will come once the peaceful protests are inevitably ignored by Washington.

This end was known, or at least should have been obvious, owing to the likelihood that Trump had no clue. America is not just ruled by fascists; we are governed by dumb fascists.

If Trump had possessed the stones, and even a whiff of economic sense, he would have called out Italian President Sergio Mattarella as a lunatic for ruining his country by putting the entire nation on lockdown. He would have quipped that Mattarella is really “Stupid Mussolini”: Mussolini made the trains run on time, but Mattarella is dedicated to making sure the trains don’t run. Trump could have then recommended the voluntary isolation of the elderly in the US, and encouraged the markets to provide spaces for sanctuary to seniors. Instead, America’s Mango Mussolini decided to show solidarity with the Eurocratic democratic socialists ruining their nations by aping their stupid fascist policy of economic suicide.

This shutdown was probably the inevitable result of letting scientists set government policy: What else would one expect from a socially awkward group of pencil-necks with no knowledge of regular human social interaction, or, for that matter, economics? Of course scientists were going to suggest ruining society; these dweebs never understood human society in the first place. All that mattered was their “human social interaction” computer models about how the virus might spread. Scientists are like Bill Murray in the movie “Caddyshack,” blowing up the whole golf course in order to stop a gopher infestation. But it’s emblematic of any government by so-called “experts,” who will “solve” the problem but inevitably show shortcomings in areas in which they are not experts, creating greater overall misery.

Even Wall Street has also been slow on the uptake; it has certainly been behind the prols mobbing the grocery stores. If you happened to turn on CNBC, Bloomberg or any other financial network last week (or even yesterday), you were treated to the highly-paid and delusional chattering class telling us that the bottom is near. Yes, I’m talking about you, Jim Kramer. All they see are percentages and profit margins, and the directives of their corporate masters. But the plebes knew there is no bottom to a market when nobody is making things or providing services and everybody is still consuming them. The bottom won’t happen until the shutdowns end.

If there’s a “sheeple,” it’s the media class. Sure, there were lots of people who stupidly accepted the incremental state-based martial law in reaction to the COVID-19 virus, and blindly repeated the political talking points. But most workers intuitively know that’s not true, even when they’re repeating those same talking points. It’s actually the people who are America’s greatest chance for ending the  madness. It’s time those workers lead, and demand an end to the charade and reopen the markets. The longer they wait, the greater the economic damage.

Workers of the world, unite … to reinstate capitalism!

Be seeing you

demsoc.jpg

 

 

 

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Socialism’s Past – LewRockwell

Posted by M. C. on March 19, 2020

Bernie Sanders’ statements are not that different from those of Lenin, Stalin, Castro, Chavez and other tyrants.

https://www.lewrockwell.com/2020/03/walter-e-williams/socialisms-past/

By

Senator Bernie Sanders’ call for socialism has resonated among many Americans, particularly young Americans. They’ve fallen prey to the idea of a paradise here on Earth where things are free and there’s little want. But socialists never reveal what turns out to be their true agenda. Let’s look at the kind of statements they used to gain power. You’ll note that all of their slogans before gaining power bore little relation to the facts after they had power.

Vladimir Lenin promised, “Under socialism all will govern in turn and will soon become accustomed to no one governing.” That’s Friedrich Engel’s prediction about “the withering away of the state.” Lenin also promised, “Communism is Soviet power plus electrification,” and “No amount of political freedom will satisfy the hungry masses.” Lenin’s successor, Joseph Stalin, said, “Advance towards socialism cannot but cause the exploiting elements to resist the advance, and the resistance of the exploiters cannot but lead to the inevitable sharpening of the class struggle.” He also said, “Gaiety is the most outstanding feature of the Soviet Union,” and that “Gratitude is a sickness suffered by dogs.”

Then there’s China’s Chairman Mao Zedong, who said: “Socialism must be developed in China, and the route toward such an end is a democratic revolution, which will enable socialist and communist consolidation over a length of time. It is also important to unite with the middle peasants, and educate them on the failings of capitalism.” Mao advised: “A communist must be selfless, with the interests of the masses at heart. He must also possess a largeness of mind, as well as a practical, far-sighted mindset.”

Cuban dictator Fidel Castro said: “Capitalism has neither the capacity, nor the morality, nor the ethics to solve the problems of poverty. We must establish a new world order based on justice, on equity, and on peace.” He added, “I find capitalism repugnant. It is filthy, it is gross, it is alienating… because it causes war, hypocrisy and competition.”

Venezuelan dictator Hugo Chavez promised: “I am going to do my best to try to create a country in which children are not living in poverty, in which kids can go to college, in which old people have health care. Will I succeed? I can’t guarantee you that, but I can tell you that from a human point of view it is better to show up than to give up.” Adding, “I am convinced that the path to a new, better and possible world is not capitalism, the path is socialism.”

His successor Nicolas Maduro said: “Fidel Castro represents the dignity of the South American continent against empires. He’s a living legend: an icon of independence and freedom across the continent.”

Bernie Sanders’ statements are not that different from those of Lenin, Stalin, Castro, Chavez and other tyrants. Sanders says, “Let us wage a moral and political war against the billionaires and corporate leaders, on Wall Street and elsewhere, whose policies and greed are destroying the middle class of America,” and “We need to change the power structure in America, we need to end the political oligarchy.”

Stalin’s campaign didn’t mention that he would enact policies that would lead to the slaughter of 62 million people in the Soviet Union between 1917 to 1987. Mao Zedong didn’t mention that his People’s Republic of China would engage in brutal acts that would lead to the loss of 76 million lives at the hands of the government from 1949 to 1987. The late Professor Rudolph J. Rummel of the University of Hawaii documented this tragedy in his book “Death by Government: Genocide and Mass Murder Since 1900.”

Because socialism is a fight against basic human nature, it requires brute force in the attempt to reach its goals. The best warning about socialism comes from Aesop, who said, “Those who voluntarily put power into the hands of a tyrant … must not wonder if it be at last turned against themselves.” We shouldn’t ignore Martin Luther King Jr.’s warning, “Never forget that everything Hitler did in Germany was legal.”

Be seeing you

Harsh Words For Liberals Who Say Socialism is Not ...

 

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Socialism Would Have Solved This Problem – LewRockwell

Posted by M. C. on March 14, 2020

https://www.lewrockwell.com/2020/03/thomas-woods/socialism-would-have-solved-this-problem/

By

Everything about this virus situation is making me crazy.

Including this kind of thing, from socialists:

So it’s “capitalism” that makes people fight over toilet paper at a time when toilet paper isn’t a product they particularly need.

Socialism, they tell us, is “a system in which scarcity is no longer an issue.”

So when there’s an unanticipated pandemic, socialism will evidently have huge warehouses of toilet paper sitting there for no reason, waiting for consumers who don’t actually need it to get all they need.

Well, that seems like a rational approach to production.

How about the fact that it’s capitalism itself that’s made it seem normal and unremarkable that everybody you know readily purchases and uses soap, disinfectants, and sanitizers?

Which European king had all of these?

Scarcity is always an issue. If we produce A with resources B, C, and D, we cannot simultaneously produce F with B, C, and D. If we employ labor in the service of one line of production, we cannot simultaneously employ it in the service of another.

Here is the situation we face:

Billions of people have an enormous number of conflicting preferences.

We have to figure out a way to satisfy as many of those preferences as possible, but arrange the means of production in such a way that in satisfying one preference we are not inadvertently depriving more urgent preferences of the resources necessary for them to be satisfied.

The market economy, with its price system, accomplishes this seemingly impossible task — or at least approaches it as closely as mankind is capable of — without coercion or central direction.

It does it so well that people consider it automatic, like a spontaneously occurring feature of human existence.

Instead of marveling at it, they complain — and risk destroying the very thing that in all likelihood makes their own existences possible.

I might add, incidentally, that one thing the market provides that socialism surely would not, is home education.

The kind of system being described above would place indoctrination of the young fairly high on its list of goals, so good luck homeschooling.

Meanwhile, we’ve created the Ron Paul Curriculum, which — gasp — presents students with more than one point of view, while at the same time giving them a top-notch education in all the major subjects, plus others: like how to speak effectively, how to run a small business, how to operate a blog, or how to manage money.

There’s going to be more demand for it in the coming weeks, for obvious reasons.

Curious? Join through my link and I throw in three bonuses I created myself:

http://www.RonPaulHomeschool.com

http://www.LibertyClassroom.com

Be seeing you

 

 

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Gospel Nonviolence and Class Warfare – LewRockwell

Posted by M. C. on February 24, 2020

This is Marxism

The wealthy and powerful, the ruling class, are wealthy and powerful in part because they are better at killing; the one thing they cannot do is carry on forever the fiction that their interests coincide with the interests of most of the community. They cannot forever con people into believing that it is in their own interests and that of their families to work or to die for the profit of the ruling class.” -Herbert McCabe, OP

https://www.lewrockwell.com/2020/02/fr-emmanuel-charles-mccarthy/gospel-nonviolence-and-class-warfare/

“I am convinced that those societies (as the Indians) which live without government enjoy in their general mass an infinitely greater degree of happiness than those who live under the European governments. Among the former, public opinion is in the place of law and community moral restrains act as powerfully as laws ever did anywhere. Among the latter, European governments, under pretense of governing they have divided their nations into two classes, wolves & sheep. I do not exaggerate. This is a true picture of Europe. If once our people become inattentive to the public affairs, you, Carrington, and I, and Congress, and judges, and governors shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions; experience declares that man is an animal which devours his own kind, for I can apply no milder term to the governments of Europe, and to the general prey of the rich on the poor.”

— Thomas Jefferson, Letter to Edward Carrington – January 16, 1787

“Class warfare is not, in the first place, a struggle between the haves and the have-nots. It has very little to do with what people in England call ‘class distinctions,’ meaning a peculiarly English kind of snobbery. It is not differences of wealth that cause class differences, but class differences that cause differences of wealth. The worker by his labor creates a certain amount of wealth, only part of which is returned to him in the form of wages, etc. The rest is appropriated by the capitalist, so called because his function is to accumulate capital in this way. The capitalist receives from a great many workers the extra wealth which they produce but do not need for their subsistence and minimal contentment, and bringing all this wealth together he is able to invest, to provide the conditions under which more work may be done — and so on. On this fundamental division between worker and employer the whole class system rests.

The worker is whoever by productive work actually creates wealth. The employer is not simply anyone who makes overall decisions about what work shall be done and how; he is the one who takes the surplus wealth created by the worker and uses it (in his own interests of course) as capital. Capitalism is the system in which capital is accumulated for investment, in their own interests, by a group of people who own the means of production and employ large numbers of other people who do not own the mean of production but produce both the wealth which they receive back in wages and the surplus wealth which is used for investment by the owners in whatever way they desire. The wealthy and powerful are wealthy and powerful, they are the ruling class, in part because they are better at killing; the one thing they cannot do is carry on forever the fiction that their interests coincide with the interests of most of the community. They cannot forever con people into believing that it is in their own interests and that of their families to work or to die for the profit of the ruling class

The wealthy and powerful, the ruling class, are wealthy and powerful in part because they are better at killing; the one thing they cannot do is carry on forever the fiction that their interests coincide with the interests of most of the community. They cannot forever con people into believing that it is in their own interests and that of their families to work or to die for the profit of the ruling class.” -Herbert McCabe, OP

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Pope Francis: Liberation Theologian

Posted by M. C. on February 8, 2020

Others were traditional welfare state redistributionists. Bergoglio was among this group.

Since then, the percentage of world’s poor has been reduced to under 10%. The Bookings Institution, a Keynesian, middle-of-the-road think tank, recently announced this.

This is what the present world economy is delivering. But the Pope doesn’t see it this way. He thinks the world needs a new taxation system and a new ethic.

This week, the Pope called for international economic redistribution. I have reprinted his speech here.

https://www.garynorth.com/public/20510.cfm

Gary North

Pope Francis is a liberation theologian.

Liberation theology was popular with a hard core of far-Left Catholic priests in Latin America from the mid-1960’s until December 25, 1991. A few of them were outright Marxists. They believed in armed revolution against the state. The Pope, then Father Bergoglio, , criticized this interpretation of Christianity.

Others were traditional welfare state redistributionists. Bergoglio was among this group. With the disintegration of the Soviet economy in the late 1980’s, followed by Gorbachev’s announcement of the suicide of the USSR on December 25, 1991, liberation theology ceased to be the latest and the greatest. It became passé overnight. It began to fade.

Bergoglio was the head of the Jesuit order in Argentina in the mid-1970’s. A decade earlier, the Jesuits had been a formidable force for theological conservatism within the Catholic Church. Then, within ten years, the Jesuits moved to the left theologically and politically. They abandoned four centuries of tradition in a decade. The story of this astounding transformation is recorded in Malachi Martin’s book, The Jesuits: The Society of Jesus and the Betrayal of the Roman Catholic Church (1987). Martin was appalled by the change. In contrast, Garry Wills applauded it in his book, Bare Ruined Choirs: Doubt, Prophecy, and Radical Religion (1972), which I reviewed in The Wall Street Journal.

From the foundation of the Jesuits in the mid-16th century until about 1965, the Jesuit order had been militant in its defense of the papacy. Pope Paul VI (1963-78) radicalized the Jesuits. He was the most theologically liberal Pope in history. He was also the most radical in terms of his social views. Pope Francis is extending his legacy after a four-decade gap. His predecessor, Benedict XVI, was the most conservative Pope since Pius XII, who died in 1958. That was a gap of almost five decades. He was a staunch opponent of liberation theology. The magnitude of this change is conveyed in the new Netflix movie, The Two Popes. The dialogue is fictional, but the theological confrontation was real. To get some idea of the change, imagine Calvin Coolidge deciding that the best person to follow him as President would be Franklin Roosevelt.

THE POPE’S CALL TO ACTION

This week, the Pope called for international economic redistribution. I have reprinted his speech here.

Last June, the Vatican posted his statement on the need to care for the poor. In that statement, he did not mention the need for state action. I have posted it here. In terms of traditional Catholic views on voluntary charity, there was nothing new in the presentation from a theological standpoint. But his language and his rhetoric was clearly that of liberation theology.

We can build any number of walls and close our doors in the vain effort to feel secure in our wealth, at the expense of those left outside. It will not be that way for ever. The “day of the Lord”, as described by the prophets (cf. Am 5:18; Is 2-5; Jl 1-3), will destroy the barriers created between nations and replace the arrogance of the few with the solidarity of many. The marginalization painfully experienced by millions of persons cannot go on for long. Their cry is growing louder and embraces the entire earth. In the words of Father Primo Mazzolari: “the poor are a constant protest against our injustices; the poor are a powder keg. If it is set on fire, the world will explode”.

This statement was issued to promote the Church’s World Day of the Poor: November 17. Why his statement was published five months early, I do not know.

His latest declaration reveals his commitment to a non-Marxist, meaning non-revolutionary, form of liberation theology. It is also consistent with what is sometimes called the new social gospel, best represented in the United States by political activist Jim Wallis. I devote a department to his theology and his tax-exempt political mobilization. It is here. The Pope has a lot more followers than Jim Wallis does. But his rhetoric is the same.

Structures of sin today include repeated tax cuts for the richest people, often justified in the name of investment and development; tax havens for private and corporate profits; and, of course, the possibility of corruption by some of the world’s largest corporations, not infrequently in line with some ruling political sector.Every year hundreds of billions of dollars, which should be paid in taxes to finance health care and education, accumulate in tax haven accounts, thus preventing the possibility of dignified and sustained development for all social actors.

Impoverished people in heavily indebted countries are suffering from overwhelming tax burdens and cuts in social services as their governments pay off insensitive and unsustainable debts. In fact, public debt incurred, in not a few cases to promote and encourage a country’s economic and productive development, can become a factor that damages and harms the social fabric. When it ends up being directed towards another purpose.

THE ELIMINATION OF POVERTY

One of the most astounding facts of the last two decades is the dramatic reduction in life-threatening poverty around the world. Nothing like this has ever taken place in man’s history. It is becoming a well-known phenomenon because of the remarkable 2007 TED talk video by Swedish statistician Hans Rosling.

Since then, the percentage of world’s poor has been reduced to under 10%. The Bookings Institution, a Keynesian, middle-of-the-road think tank, recently announced this.

Looking at poverty trends worldwide, World Data Lab now estimates that on New Year’s Day 2019, just under 600 million people across the world (excluding Syria) will live in extreme poverty. By 2030, this figure is expected to fall to some 436 million.The good news is that 2019 will start with the lowest prevalence of extreme poverty ever recorded in human history—less than 8 percent. In all likelihood, this level will set the “ceiling” for a new era of even lower single-digit global poverty rates for the foreseeable future.

This is what the present world economy is delivering. But the Pope doesn’t see it this way. He thinks the world needs a new taxation system and a new ethic.

You, who have so kindly gathered here, are the world’s financial leaders and economic specialists. Together with your colleagues, you help set global tax rules, inform the global public about our economic condition, and advise the world’s governments on budgets. They know first-hand what the injustices of our current global economy are, or the injustices of individual countries.Let us work together to end these injustices. When the multilateral credit agencies advise the different nations, it is important to take into account the high concepts of fiscal justice, responsible public budgets in their indebtedness and, above all, the effective and leading promotion of the poorest in the social network. Remind them of their responsibility to provide development assistance to impoverished nations and debt relief for heavily indebted nations. Remind them of the imperative to stop man-made climate change, as all nations have promised, so that we do not destroy the foundations of our Common House.

The Pope’s mindset was formed by 1975. His worldview has not changed. His rhetoric has not changed. Meanwhile, the world is getting steadily richer. The poor are steadily getting richer.

While I don’t have a biblical passage to support the following, I recommend to Pope Francis a familiar slogan in American life: “If it ain’t broke, don’t fix it.”

THE BIBLE PROMOTES CAPITALISM

For over half a century, I have been arguing that the system of property rights mandated by the commandment against theft (Exodus 20:15) and also by the Mosaic laws defending private property inevitably produce a free market society when they are widely respected by the public and defended by civil government. In turn, free market society inevitably increases per capita wealth. I have defended this position in 31 volumes of economic commentaries on the Bible. I have defended it in four volumes of detailed economic analysis.

The Pope does not believe that biblical law and biblical ethics promote a private property social order which in turn produces capitalism. The theologians in Salamanca, Spain, argued that this was the case back in the 1500’s. But the Pope either is unaware of this or does not believe what the school of Salamanca taught.

I hope that a future Pope spends his years as a priest, a bishop, and a cardinal reading and re-reading the economics books written by members of the school of Salamanca. Even better, maybe he will read my books. I can always hope. After all, I’m postmillennial.

 

 

 

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Serving Your Fellow Man.

Posted by M. C. on November 12, 2019

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When Billionaires Want to Get Rid of Capitalism | Mises Wire

Posted by M. C. on October 29, 2019

In this train of thought, free market economies are nothing more than gigantic voluntary systems of cooperation based on reciprocity, where people who do not know each other can cooperate to get what they need or want without excessive waste.

But Hanauer can’t bring himself to praise that kind of cooperation and reciprocity because market exchange also involves self-interest and competition. Hanauer, as many before him, desires a specific kind of cooperation. Hanauer only wants cooperation when he deems it to be sufficiently virtuous. Free cooperation isn’t acceptable among self-interested people, Hanauer contends. It can only be allowed if the people involved have the right motivations.

This has long been a fantasy among critics of market freedom.

https://mises.org/wire/when-billionaires-want-get-rid-capitalism?utm_source=Mises+Institute+Subscriptions&utm_campaign=ebb3aa251a-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-ebb3aa251a-228343965

“Successful economies are not jungles, they’re gardens, which is to say that markets, like gardens, must be tended, that the market is the greatest social technology ever invented to solving human problems, but unconstrained by social or democratic regulation, markets inevitably create more problems than they solve.”

These are the words of Nick Hanauer, a self-described capitalist. And a billionaire.

He was an early investor in Amazon.com and founded Aquantive Inc., which was purchased by Microsoft for $6.4 billion.

More recently, he has been receiving a lot of attention as a “thinker.” According to a TEDtalks, “Nick Hanauer is one of the world’s most provocative thinkers about our society’s growing inequality and the dire consequences it creates for our democracies.”

In his 2019 TED lecture, titled “The dirty secret of capitalism—and a new way forward”  Hanauer warns us of the supposed dangers of capitalism and economists who have supported market freedom:

“If we truly want a more equitable, more prosperous and more sustainable economy; if we want high-functioning democracies and civil society, we must have a new economics. […] But how do we leave neoliberalism behind and build a more sustainable, more prosperous and more equitable society? […] It’s becoming painfully obvious that the fundamental assumptions that undergird neoliberal economic theory are just objectively false […]. It isn’t self-interest that promotes the public good, it’s reciprocity. And it isn’t competition that produces our prosperity, it’s cooperation”.

In his talk, Hanauer stresses reciprocity and cooperation while blasting self-interest and competition.

Reciprocity and cooperation are indeed good things. But contrary to what Hanauer thinks, they are, in fact, the very basis of capitalism, a system of voluntary exchanges. In a system of voluntary exchange, I give you something you want if you give me back something I want. In this case, money is just an instrument (transferable and deferrable) to make trade easier and flexible (feasible in complex societies).

In this train of thought, free market economies are nothing more than gigantic voluntary systems of cooperation based on reciprocity, where people who do not know each other can cooperate to get what they need or want without excessive waste.

But Hanauer can’t bring himself to praise that kind of cooperation and reciprocity because market exchange also involves self-interest and competition. Hanauer, as many before him, desires a specific kind of cooperation. Hanauer only wants cooperation when he deems it to be sufficiently virtuous. Free cooperation isn’t acceptable among self-interested people, Hanauer contends. It can only be allowed if the people involved have the right motivations.

This has long been a fantasy among critics of market freedom.

In 1714, for example, the Dutch writer Bernard Mandeville was responded to this criticism with his poem The Fable of the Bees. In his story, a beehive was thriving on the “vices” (self-interested behavior) of its bees. But then bees became virtuous. They demanded a new kind of cooperation, no longer acting in their own self-interest but for the greater good of the hive. The result? The beehive collapsed.

For theorists like Mendeville and Adam Smith, self-interested behavior wasn’t necessarily good. But it was assumed to be human nature, and thus any good political economy, they thought, should take this into account.

Hanauer disagrees, which is hardly surprising. He affirms acerbically that the “neoliberal assumptions (of free-market) are just objectively false.” The economy must be “tender,” constrained by social norms and regulations, which means a state-organized cooperation. His point is that a good system replaces voluntary cooperation with forced cooperation. Socialists have been trying to do this for centuries. Moreover, cooperation based on coercion cannot be taken as a sign of prosperity.

Let us examine the historical record. Some historians reported that after Germany was divided into two following the Second World War, East Germans displayed a high degree of “cooperation.” But this wasn’t because of a change in human nature. It was because people who lived there were forced to use their social network for basic survival. A simple drain clogged up would turn into a matter of calling in favors. The solution was not a simple matter like calling for a plumber.  Inhabitants of the East had to know someone who knew someone who could help — there was little money, few accessible equipment and tools, and no available spare parts. In West Germany, on the other hand, people were reported not to be so “cooperative,” so to speak. True enough, because they could simply hire some (unknown and self-interested, perhaps moody) plumber, who would impersonally fix the problem. Guess which Germany had a higher standard of living?

Of course, even in a heavily regulated and centrally planned society — one designed to abolish all the excesses and problems of the marketplace — there’s no reason to believe self-interest was actually abolished.

Why Not Teach by Example?

On a personal level, however, it appears Hanauer is not a big fan of voluntary action.

At the end of the lecture, the interviewer asked Hanauer why he should not just give all his money away and join the 99 percent? If he cares so much about taxes, why doesn’t he pay more voluntarily? If he cares so much about wages, why doesn’t he pay more?

He could be a role model, such as Henry Ford, who shocked the business world by paying higher (doubled) wages for his employees even (or especially) in times of crisis.

Nick Hanauer answered he could do that. But (according to him) it would not make that much of a difference. He said to had discovered a strategy that works a hundred thousand times better: using his money to build narratives and to pass laws that will require all the other rich people to pay taxes and to pay their works better – for example, the minimum wage.

Here, a basic moral principle is removed. As Frédéric Bastiat noted: “it is impossible for me to separate the word fraternity from the word voluntary. I cannot possibly conceive fraternity legally enforced, without liberty being legally destroyed, and justice legally trampled under foot.”

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Part I: Mass Media vs The Media of The Masses. – Planosophy

 

 

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Government Meddling Is the Reason You’re “Underpaid” | Mises Wire

Posted by M. C. on October 10, 2019

…government is the problem and competition is the answer

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People frequently allege that, under capitalism, people aren’t paid what they are worth to employers. As a measure of how frequently that gets repeated, a Google search of “underpaid” I just did turned up 1,770,000 hits. And there is one sense in which that allegation may be true. But the commonly-drawn implication that state coercion will improve things is false.

The competitive market process does not guarantee that your payment equals your value to your employer. It guarantees you are paid at least as much (adjusted for a host of other circumstances and preferences) as your next-best known alternative.

Say Bob and Bill are your potential employers. Bob offers you $50,000. If Bill values your additional productivity at $70,000, what will he offer you? It is indeterminate. All we know is that it must be enough to outbid Bob, other things equal, to attract you. Bill need not pay you what you are worth to him. But even if you are paid less than your value to Bill, your supposed “underpayment” does not harm you. You are made better off than you would have been by any offer you accept from Bill.

If, however, Barbara joins those who seek your services, and offers you $60,000, Bill will have to beat that, rather than $50,000, to keep your services. If Betty then also joins the pursuit of your labor services at $69,000, that becomes the number that must be beaten. In other words, the more competitive the market for your labor becomes, the closer your pay approaches what you are worth to your employer, because the value of your alternatives approaches your value to your chosen employer. And only the free market guarantees that you will be paid that well.

Better Wages Come from More Competition Among Employers

This reveals why government coercion is not the path to increased worker well-being. Governments and their “big labor” progeny are constantly advancing mandates that impose barriers to entry and competition for their favored groups from other workers. When reduced barriers to entry and increased competition are the means by which workers become paid nearly what they are worth to employers, such coercive government “solutions” actually guarantee that many workers will be paid far less than they would otherwise have been.

Government is also a major source of other reasons why workers’ paychecks are less than their value to employers.

Government-mandated worker benefits provide one example. The costs of those benefits must ultimately come out of employees’ total compensation. So while government sponsors claim credit from recipients for mandated health coverage, worker training, family leave, workman’s compensation, etc., workers’ earnings are reduced to cover their added cost. But because these act as hidden taxes, employers get the blame for the lower wages that result.

Employer “contributions” for state unemployment and disability insurance, as well as their half of Social Security and Medicare taxes, are another source of such worker “underpayment.” Employers, knowing they will be on the hook for these bills, over and above wages paid, offer less in wages. Again, the money ultimately comes from employees’ pockets, but they blame their employers instead of the government for reducing what they take home as a result. When workers say “I was robbed,” they may be correct — but they finger the wrong suspect.

And these costs are substantial, An article in the September 29 Los Angeles Times noted that they can comprise 30% of employers’ labor costs.

Corporate taxes have similar effects. To the extent that such taxes’ effects reduce net-of-tax earnings, they reduce the value of workers to employers. Yet again, government gets the money and accolades from beneficiaries of added expenditures financed, while businesses are scapegoated as if they caused the underpayment. In, fact, Steven Entin summarized recent data-based studies on corporate tax incidence as showing that “labor bears between 50 percent and 100 percent f the burden of the corporate income tax, with 70 percent or higher the most likely outcome.”

The widespread assertion that people aren’t paid what they are worth to employers may be true in one sense, but not in the sense those making the assertion usually imply. “Greed” or some faulty “ism” is not to blame, and more government interferences provides no magic solution. The maximum such “underpayment” in a competitive labor market is the extent that your value to your highest valuing employer exceeds that of your second-highest valuing employer. And that difference gets smaller as labor markets get more competitive. On the other hand, there are many ways government’s coercive power reduces what workers take home well below their value to their employers (or how valuable they would be if they were freely allowed to compete for all jobs), in order to fill their treasuries and protect their “friends” from competition, while blaming others for what they have imposed. So, if being paid what someone is worth to an employer is the standard, government is the problem and competition is the answer.

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No, Capitalism Doesn’t Threaten Humanity | Mises Wire

Posted by M. C. on October 6, 2019

Presumably Monbiot would say that past success is no guarantee of future performance, but as a different Guardian article explains, the UN reports that the world has seen “astonishing” improvements in human welfare just since 1990.

https://mises.org/wire/no-capitalism-doesn%E2%80%99t-threaten-humanity

Presumably bolstered by the fiery claims of Greta Thunberg and the general theme of Climate Week, people on Twitter have been declaring that capitalism threatens humanity. This angst rekindled interest in a Guardian article that ran a few months ago, in which author George Monbiot argued that the very nature of capitalism is “incompatible with the survival of life on Earth.” Not only do such claims ignore the obvious progress of humanity staring us in the face—and the environmental activists are supposed to be the empirical ones in this debate—but even if Monbiot’s worries about the climate were correct, capitalism would still be the best social system to deal with the crisis.

Monbiot’s Case Against Capitalism

The following excerpt summarizes Monbiot’s two-pronged argument for why capitalism threatens our entire species:

Capitalism’s failures arise from two of its defining elements. The first is perpetual growth. Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity.

…The absolute decoupling needed to avert environmental catastrophe (a reduction in material resource use) has never been achieved, and appears impossible while economic growth continues. Green growth is an illusion.

A system based on perpetual growth cannot function without peripheries and externalities. There must always be an extraction zone – from which materials are taken without full payment – and a disposal zone, where costs are dumped in the form of waste and pollution. As the scale of economic activity increases until capitalism affects everything, from the atmosphere to the deep ocean floor, the entire planet becomes a sacrifice zone: we all inhabit the periphery of the profit-making machine.

…

The second defining element is the bizarre assumption that a person is entitled to as great a share of the world’s natural wealth as their money can buy. This seizure of common goods causes three further dislocations. First, the scramble for exclusive control of non-reproducible assets, which implies either violence or legislative truncations of other people’s rights. Second, the immiseration of other people by an economy based on looting across both space and time. Third, the translation of economic power into political power, as control over essential resources leads to control over the social relations that surround them.

Monbiot’s critique of capitalism is entirely unfounded. In the first place, it defies all empirical grounding, which is ironic because it’s my side of this debate that’s allegedly composed of unscientific “deniers.” Especially as formerly communist countries move towards freer markets, the world has seen dramatic improvements in living standards, while the relevant availability of “depletable” resources has increased; even climate-related deaths have plummeted over time.

But it gets even worse for Monbiot’s thesis. Even if we imagine a scenario—contrary to reality—where humanity did run into a crisis because of natural resource crunch, the best way to deal with the situation would be reliance on private property and market prices. To blame capitalism for the potential problems of a finite world is like blaming thermometers for the flu.

Just the Facts: It’s Getting So Much Better All the Time

In this section I’ll illustrate some of the basic facts, documenting that human welfare has drastically improved during the same period that we have ostensibly seen the ravages of human-induced climate change.

First, consider a chart from Bjørn Lomberg (and reproduced by Marlo Lewis) that shows climate-related deaths from 1920-2017:

Climate-1-1-768x728.png

It’s hard to see evidence of impending disaster in the above chart.

As the chart shows, U.S. “proved reserves” of crude are at an all-time high at some 39.2 billion barrels (as of 2017), up from 13.6 billion barrels in 1930. The increase in crude reserves has occurred despite the fact that the U.S. has produced an enormous amount of crude oil over this period.

Indeed, as the separate EIA chart shows below, since 1950 U.S. crude production has rarely fallen below 5 million barrels per day, and it’s currently (as of June 2019) at a record high of some 12.1 million barrels per day.

U.S. Field Production of Crude Oil

Cliamte-3-768x284.png

The pattern is similar for world oil reserves and production, but I chose to use U.S. data because it is the most reliable. There’s also a similar pattern for natural gas and coal; as this 2011 IER report shows, North America alone has enough fossil fuels in the broader category of “recoverable resources” to satisfy current consumption rates for literally centuries. And they are growing. According to the Potential Gas Committee’s latest report, U.S. reserves of natural gas increased by the energy equivalent of 100 billion barrels of oil in just the last 2 years.

Now how can this be possible? How can the U.S., for example, have more “proved reserves” of oil now, than it did in (say) 1950? The answer is that it doesn’t make sense for humans to go out and find every last drop of oil (or lump of coal) housed in planet Earth. At any given time, it’s only sensible to have located the precise deposits of a healthy margin of such depletable resources, which is only a small fraction of the physical stockpile.

Yes, since there is a finite amount of crude oil, it must be the case that humanity will eventually have to switch to some other energy source. But humanity—especially in the modern age of relatively capitalistic institutions—has so far had no trouble maintaining consistent increases in total output, notwithstanding the “finite” resources on Earth (or the physical universe, for that matter).

Presumably Monbiot would say that past success is no guarantee of future performance, but as a different Guardian article explains, the UN reports that the world has seen “astonishing” improvements in human welfare just since 1990. Specifically, more than a billion people were lifted out of “extreme poverty,” with “the number of people living on less than $1.25 a day [falling] from 1.9 billion in 1990 to 836 million in 2015.”

What would the data have to look like to vindicate capitalism from the charges of Monbiot?

Even in a Collapsing World, Capitalism Would Be Our Best Defense…

Conclusion

George Monbiot alleges that capitalism, left unchecked, will cause the literal extinction of humanity. His arguments ignore all of the evidence of capitalism’s benefits staring us in the face. Yet even on a theoretical level, private property and market prices help organize human activity so that we can deploy our scarce resources in the most efficient manner. Empirically, capitalism has allowed humanity to flourish with an ever-rising standard of living. But even in a catastrophic scenario where we hit a hard resource constraint, capitalism would still be an important tool in our defense, just as we would badly need math and science to help us cope with the emergency.

Originally published at the Institute for Energy Research

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