Sunday, June 12, 2016
I believe that guns will someday be unnecessary, but at the moment the trend is in the opposite direction.
Sunday, March 27, 2016
A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.
Saturday, February 27, 2016
After David Sloan Wilson wrote the article, The Road to Ideology: How Friedrich Hayek Became a Monster, Peter Boettke invited him to give a seminar at the F.A. Hayek Center for Advanced Study in Philosophy, Politics, and Economics. On February 11, 2016, Wilson presented the seminar, which is summarized here with a link to a video that incorporates a recording of the seminar and the slide presentation. I suggest that those interested in Austrian economics or coming from a non-leftist position watch the presentation as it will give you a clear idea of what we are up against. Make no mistake, Wilson and his comrades at Evonomics are heavy hitters and have an agenda that you won't like. Having listened to the presentation once, I have a few thoughts.
First, Wilson alleges that laissez-faire has its roots in the Christian worldview of universal harmony. Doing so is an attempt to discredit it as mystical and unscientific, and rob it of its roots in the Enlightenment. The reality is that Christianity was the home of top-down, unrelenting authoritarianism until it was tamed by the realization that markets tended to reduce or eliminate the antagonisms between religious groups. The resulting intellectual movement, in which those such as Voltaire argued that religion and aristocracy should be de-emphasized and commerce elevated, was probably more of an influence on Christianity than the other way around (see Jerry Z. Muller, The Mind and the Market, p 23).
Wilson goes on to state that progress came from the societal suppression of "disruptive, self-serving behaviors," rather than the realization on the part of individuals that cooperation was to their advantage in achieving goals that would have been difficult or impossible for them on their own (see Ludwig von Mises, Human Action, p 143). This view results in a bias toward top-down (coercive) rather than bottom-up (evolutionary) thinking. Wilson is definitely pushing methodological collectivism. He believes societies were successful because they dragooned their members into following the rules, not because they had rules that helped individuals flourish, thereby attracting and keeping members. Group selection is a reality, but only in the context of the feedback of individual selection that makes one group prosper over another.
While wanting to speed up group selection, Wilson fails to realize that the state suppresses selection by bypassing the feedback mechanism of profit and loss, and even imprisons its victims within its boarders, preventing the possibility of "voting with your feet." Failing the latter, there may be an effort for governments to form cartels or impose rules through a world-wide body, eliminating the possibility of selection still further. After all, if there is only one body, we are done with selection. The feedback of money profit and loss in an environment of open competition is superior, and the only objective method I can see that can facilitate group selection.
When watching Wilson's slides you will see that he believes the Earth is being destroyed by human activity. The Evonomics agenda is to reverse that perceived destruction by imposing an "intelligent design," cloaked in science, that has no possibility of effective criticism or reversal--of negative selection. Only by critically developing our own arguments and pointing out that their approach is actually anti-evolution can we succeed in defeating their effort.
Wednesday, February 03, 2016
that disputes Mises's requirement of private property to permit economic calculation.
First of all he suggests that several property, or multiple ownership, is to be preferred to private property and that control is to be preferred to ownership. These preferences, in Denis's opinion, take a socialist or planned economy out of the realm of impossibility, at least in terms of Mises's argument.
As I see it, Denis completely misses the point that the owners of private property, singly or severally, value it and are at risk when purchasing or investing. Without the risk of loss -- what Nassim Taleb calls an 'absence of "skin in the game"' -- prices are simply wild guesses and do not reflect the values or opportunity costs of market participants.
Denis does mention the principal-agent problem, in which owners are subject to the will of managers, talking as if this process amounts to expropriation. Certainly this situation is a problem in a publicly held, bureaucratically run, stock corporation; but he fails to recognize that owners may withdraw their property from the managers if they are dissatisfied with the results. If there are no owners, there is no one to value the results, and hence no one to withdraw the property. If the benefits and costs of control are added to his system, he arrives at the a point where it is hardly different from that of private property.
Perhaps Mises fails to adequately stress the connection between the ownership and valuation of property, leading Denis to misunderstand the thrust of the argument. But it is also possible that Denis, in his eagerness to upend the Austrian/Misesian argument, has a great incentive to ignore or misinterpret it.
Tuesday, February 04, 2014
Talking about "the market" in a more generalized way – that is, one which includes all of the living world and nonconsensual interactions that occur between humans and between species – requires increased semantic clarity. In order to achieve this increased clarity Karl Popper's three worlds can be used as a model. After introducing a terminology that parallels that of Popper its potential utility is discussed.
Three Worlds, Three Markets
|English: Karl Popper in 1990. (Photo credit: Wikipedia)|
Firstly, there is the market that is composed of the physical world. As Popper says, in describing world 1:
There is, first, the world that consists of physical bodies: of stones and of stars; of plants and of animals; but also of radiation, and of other forms of physical energy. I will call this physical world ‘world 1’. (1978, 143)This market consists of all of the interactions, physical and/or chemical, that occur in the physical world. These interactions, as far as we know, are not guided by conjectural knowledge. This physical market is called "market 1".
Market 1 can be subdivided into the living and non-living, as Popper suggests:
If we so wish, we can subdivide the physical world 1 into the world of non-living physical objects and into the world of living things, of biological objects; though the distinction is not sharp. (1978, 143)Secondly, there is the market of conjectural knowledge. This description might be thought to augment Popper's world 2, which he described as follows:
There is, secondly, the mental or psychological world, the world of our feelings of pain and of pleasure, of our thoughts, of our decisions, of our perceptions and our observations; in other words, the world of mental or psychological states or processes, or of subjective experiences. I will call it ‘world 2’. (1978, 143)Popper's view is expanded to include the conjectural knowledge encoded in DNA or any similar, yet-to-be-discovered encoding system. This market is called "market 2".
Again, market 2 can be subdivided following Popper's prescription:
World 2 could be subdivided in various ways. We can distinguish, if we wish, fully conscious experiences from dreams, or from subconscious experiences. Or we can distinguish human consciousness from animal consciousness. (1978, 143)Thirdly, there is the market of expressed knowledge. This market consists of the actions taken based on the conjectural knowledge of market 2. Popper describes world 3 as follows:
By world 3 I mean the world of the products of the human mind, such as languages; tales and stories and religious myths; scientific conjectures or theories, and mathematical constructions; songs and symphonies; paintings and sculptures. But also aeroplanes and airports and other feats of engineering. (1978, 144)In striking contrast to his descriptions of worlds 1 and 2, Popper includes only "the products of the human mind" (emphasis added). Omitting the non-human expressed knowledge of plants and animals, including everything from the behavior of the E. coli bacterium (Cziko, 1995, 120) to the engineering feats of the Great Sequoias and honey bees, clearly damages the consistency of the discussion if nothing else. As Popper might agree, these expressions of world 2 cannot be criticized without becoming objects in world 3, where criticism is based on evolutionary fit. Notably, this form of criticism also affects world 2 as Popper framed it, culling those living systems whose conjectural knowledge is not up to the task.
With the addition of these non-human components this market is called "market 3". Clearly, the human component of market 3 is where business plans are exposed to the criticisms of consumers, with the result that the objects that appear in market 1 will be created and the conjectural knowledge of market 2 will be modified.
Popper suggests some subdivisions to world 3:
It would be easy to distinguish a number of different worlds within what I call world 3. We could distinguish the world of science from the world of fiction; and the world of music and the world of art from the world of engineering. (1978, 144)Market 3 contains some additional markets – the markets of successful and unsuccessful expressed knowledge, and the markets of voluntarily and involuntarily expressed knowledge. These distinctions are blurred and the two sets definitely overlap.
ConclusionWhere does the forgoing discussion get us? Most importantly, it enables us to talk about society in a non-religious way that unifies it with the rest of the living world. With it we become aware of a wider range of questions that are rarely even asked. Why is killing animals or plants acceptable while killing humans is not? Why is the killing of some humans supported or even demanded? Why is the enslaving of animals widely practiced while enslaving humans is considered barbarous? Would a super-human species treat us more like we treat animals or more like we treat each other?
Without an ability to explore these questions in a value-free manner we cannot identify man's position in the universe and investigate what environment is most conducive to his flourishing. Hopefully, we will also be able to discern the difference between conjectural knowledge that is universally applicable and that which is dependent on time and place.
BibliographyCziko, G. (1995). Without Miracles: Universal Selection Theory and the Second Darwinian Revolution. Cambridge, MA: The MIT Press.
Popper, K. R. (1978), "Three Worlds", In The Tanner Lecture on Human Values (Delivered at The University of Michigan on April 7, 1978). (pp. 143-167). Retrieved November 26, 2013 from http://www.tannerlectures.utah.edu/lectures/documents/popper80.pdf.
Tuesday, November 05, 2013
The Errors of Galambos
IntroductionFor a number of years I have thought about Galambos's ideas while reading more from other sources - primarily Austrian economics (which Galambos mentioned favorably, except in the context of epistemology). Some of what I read served to support what Galambos said and some clashed with it. In re-evaluating Galambos's ideas I came to the conclusion that he had made errors - in fact, significant errors - and that this forum is the place in which to discuss them.
Although I believe that Galambos made significant errors, my understanding of the world has certainly been enhanced by his teachings, and I believe that he may have long-term significance, assuming that his ideas are ever published or referenced in other publications.
Error #1 - The Definition of PropertyThe definition of property is constrained in that it applies only to "volitional beings," having been modified from applying only to "man" (SIAA, pg. 21). Galambos was queried a number of times as to the test which could be applied to determine membership in this class, and he answered it simply by suggesting that a being could be blocked in its path and its choice to turn one way or another would indicate that it exhibited "volition." Interestingly, if one blocks a plant and gives it the time, it will choose another route, but Galambos never discussed the killing of plants as problematic.
My view is that property is an attribute of all life, and that the cell wall is the first fence (it is possible that others will extend the concept into the realm of bio-chemistry or even chemistry, but we shall see that such an extension does not meaningfully impact the ideas I will express). Each living thing values its own property as its existence and procreation depend on it. Expanding our view to non-volitional beings makes the definition truly universal.
Why did Galambos not include plants? I believe it is because the entire food chain then becomes one of property acquisition through destruction (he would have called it plunder) - a conclusion unacceptable to someone building a morality upon property. Viewing all property in a positive light means that some living things must be excluded from the definition or we will have to admit that our entire existence is based upon the destruction of this positive value.
Error #2 - The Enshrinement of Property as the Central Concept in an Absolute MoralityIf the definition of property is to be expanded as suggested above, what happens to an absolute morality based upon property? My view is that it crumbles, and we must accept the fact that an absolute morality, if it exists, cannot be based upon property. Von Mises clearly comes down on the negative side of the question - there is no absolute system of values (_Theory and History_, pg. 36) - and I mostly agree. The only sense in which I may disagree is that there may be an objective (or absolute) system for man, but it is unknowable, just as the objective universe is unknowable. However, through market action (the employment of the scientific method in daily life), we may approximate an implementation of this morality. I believe that this implementation would be much as Galambos described.
The central concept of life is value - the relative subjective attraction to something ("something" is meant to cover the complete range of concepts which Galambos included in property). Values are not rational (although not irrational, either) - one does not decide to like something or dislike it (Bernard de Mandeville, Fable of the Bees (Liberty Fund, 1988), Introduction, pg. lxxix). Values alone, without constraint, would produce an unthinkable range of actions. People would take what they wanted and civilization would be impossible. It is the cost of achieving values which constrains action, and which brings about rational behavior through the act of choice. If the apparent costs exceed the expected benefits, the action will not be taken (of course, people make mistakes in their estimations of either or both). Costs come in at least 2 flavors - psychological, as in doing something which violates one's personal belief system (conscience) or the belief system of respected individuals; and material, as in jail time, shunning, fines or, in a free society, restitution.
If one is able to transfer the cost of achieving values to others, he generally does. I call this latter behavior "political." Political behavior exists at all levels of society and can be extremely destructive - no one in this forum needs to be made aware of that fact. The basic point is that it is merely an avenue that may be chosen to achieve values - more income for the farmer, more hiking destinations for the environmentalists, more countries that have governments like ours that can be identified as great accomplishments. The groups involved in this behavior generally perceive that they cannot achieve their values through market action or that the cost of doing so would be too great, and choose the lower-cost political approach. As long as this option is available it will be chosen - by your family, your friends, your customers, your employer, etc. Calling them "immoral" is more likely to alienate them and label us as "out of touch" or "looney" than to change their behavior.
Note that the killing of animals and plants for food, or the imprisonment of animals as pets, draught animals and food factories produces a net value. We do these things because the only value the subject being provides is in the use we make of it - even as a "friend." Our fellow human beings have been shown to produce greater value as friends and workers than as food or slaves. For that reason and that reason alone cannibalism is non-existent and slavery appears primarily only in cases where immigration law makes it economic.
In the final analysis, the concept of morality is made unnecessary by market action. Over time market action, acting through a discovery process (Hayek's words), will produce the institutions of property protection. Whether or not they will match any pre-conceived morality is questionable. In fact, I believe it is an internal contradiction to proclaim a market-regulated morality as both Galambos and Rothbard did. What we can predict is that the institutions will reflect the values of their customers.
As a final aside, individuals are free to maintain any morality that they choose - Christian, Islamic, Utilitarian, etc. However, it is the market where the benefits and costs of adherence to these ideals will be valued.
Error #3 - "There is no such a thing as a small interference with property!"Sure there is! If your neighbor's kid uses your pool without permission will civilization fall? If a close friend is late for lunch or, god forbid, forgets it, do you banish him from the moral island? If someone who provides you great value - say a customer or a teacher - treats you shabbily, do you end all contact? Of course not! You evaluate the situation (not necessarily by putting it in a spreadsheet) as to what you will gain by concealing or denying your displeasure against the loss incurred by speaking out or simply terminating the relationship. This fact explains why "great" people can do the most horrible things and still retain the loyalty of those around them. The more value they provide their associates the more they are willing to put up with abuse (Kay Nolte Smith, an objectivist author, wrote Elegy for a Soprano, an interesting novel on the subject).
Error #4 - The Protection of Primary Property is Antecedent to the Protection of Secondary PropertyGalambos took what he perceived as an injustice (the lack of credit for his first-stage optimization work) and elevated it to the central problem of mankind. That primary property protection is of value cannot be denied. There is hardly a day that goes by in which a major story does not appear (Verizon vs. Vonage comes to mind) concerning intellectual property. At the same time that the market is pursuing solutions to the problem there are also antagonists on the left (Richard Stallman of the Free Software Foundation for instance) and even within the libertarian community - just look at the diatribes against it by Stephan Kinsella on the Ludwig von Mises Institute blog (http://www.mises.org/blog) or read his paper, "Against Intellectual Property" (http://www.mises.org/journals/jls/15_2/15_2_1.pdf).
To expand on the libertarian intellectual property issue, they largely have a problem with it because a) intellectual property is not scarce in the economic - that is "rivalrous" (more than one person may use it at a time) - sense and b) property has moral implications which include the "right" to destroy someone in defense of it (they feel uneasy about the idea of killing someone who has, for example, recited a poem without permission of the author). My response to "a" is that economics might be better served by orienting itself to value - a well-established Austrian concept - rather than scarcity. To "b" I say that defense may incur costs and that killing with impunity is not part of any market system I expect to exist.
In any case it is clearly more difficult to protect primary property than secondary or primordial property, and it will only be protected when its protection can be supported by the institutions which are already successful in more mundane spheres (for instance a company which registers land titles may expand to register innovation titles).
Error #5 - Intellectuals Do Not Like Capitalism Because It Does Not Make Them MillionairesThis item is not a 100% error, as I believe it is half right (but maybe not the more important half). Einstein described the "economic anarchy of capitalist society" as "the real source of the evil" ("Why Socialism?" in Ideas and Opinions, Albert Einstein (Bonanza Books, 1954), pg. 156). F.A. Hayek wrote extensively on the idea that the spontaneous order we find ourselves in is the "result of human action but not of human design" (The Fatal Conceit: The Errors of Socialism, The Collected Works of F.A. Hayek - Volume I, W.W. Bartley, Editor (University of Chicago, 1989)). Einstein's complaint is one that is shared by many intellectuals - that without specific design the market will not reflect the values they cherish (which may include things like income equality and free health care) and that human intervention will provide superior results. These complaints are voiced primarily as declarations of "market failure" (the "digital divide" and the lack of "universal" health care come to mind) and generally lead to political pressure to rectify the "problem." Possibly, making them millionaires would undermine these views, but my guess is that they would just be a new class of movie stars, and we all know their views, with a few exceptions, on markets.
I have learned in discussing the free society with people of, shall we say, "interventionist" leanings that the one thing that must be made clear is that market outcomes are not predictable and could be distasteful to them. I believe that it has been a mistake of "capitalists" to claim that any specific reduction in state intervention (like California's "de-regulation" of the utilities) will produce lower prices. It is entirely possible that the intervention has previously created a below-market price (as in flood insurance) and the reduction will produce higher prices which will impact the consumer negatively. What I do believe is that the more free the market, the more prices will reflect the values of consumers.
ConclusionThere are other errors that are implied by those listed above, but the readers of this forum are certainly able to work them out for themselves. I will be happy to respond to questions as time permits.
There is a history to all of this, and a lot of it consists of observing Galambos and arguing or discussing ideas with other FEI students. What a shock it was to find out that other well-intentioned and intelligent people who heard what I heard disagreed with me on points that I thought were made so perfectly clear. Agreement even on what was coercive seemed to be beyond possibility with some individuals, and it made me wonder if there was any hope of planet-wide agreement - in a generation or ever. That led me to completely embrace Galambos's statements about self-interest - that primary property and freedom would never be embraced other than if it was in the self-interest of its consumers. Such a market system could not be governed by a higher morality as that would imply a priesthood exempt from market forces. So, in that process Galambos's strategy for success eliminated his concept of morality - or any extra-market value system - from my mind.
Galambos's contributions, if ever recognized outside the diminishing circle of his students, will be primarily in his strategy of building the free society as opposed to fighting for it, and in the independency tests that could provide a foundation for a primary property industry. In the context of building such a society credit and insurance (possibly to be credited to Piet Bos) will certainly play major roles. The connection between credit and cooperation may be made by the astute (FEI-educated) reader in Robert Axelrod's The Evolution of Cooperation which Dr. Thomas J. McQuade gave to me many years ago.
Galambos was an important person to everyone who knew him - however slightly. His personality was so powerful and overwhelming that it made clear thinking difficult and opposition unthinkable. I would not give up those years (1975-1982) for anything and count as friends a number of people I met at FEI. My intent is certainly not to destroy Galambos, but to attempt to rectify error and suggest new ways of thinking which can lead to a society which is close, if not identical, to the one he described.
Brian J. Gladish
2007 April 22
Tuesday, October 29, 2013
When one does something like what I'm doing – posting articles that aspire to be scholarly – one has to wonder, why? After all, to say that I have a small readership is probably to exaggerate on the high side. I suspect that I even have an anti-audience – people, primarily academics, who avoid reading things I write because they have not been written by an academic or been peer-reviewed. Robert Higgs – who I have met, and who seems like a nice guy – has scoffed at authors who write on the Internet because they do not have a scholarly outlet that will publish them. Steve Horwitz has declined to respond to criticisms from people who have not had those criticisms subjected to the same academic standards of publication that his work has, and Peter Boettke has made it clear that not being in academia means it is unlikely, if not impossible, that you can add to economics, either in theory or application.
Of course, they don't know the years of tortuous thinking I have gone through to try to resolve the fundamental questions I write about; but even if they did they wouldn't have any reason to pay any more attention. Lots of people beat their heads against walls trying to figure something out, without success, and there is no reason to believe that I'm any different. And besides, I doubt that many of them even believe that the issues I worry over are unresolved or, if unresolved, merit much thought.
One possibility is that I am writing for myself, but in the sense that just isn't so. I really hate writing – thinking is a lot more fun. Writing is just the laborious process of trying to organize your thoughts in such a way that others can make sense of them. I already know what I think and am quite content with my understanding of the world. Putting it down takes time away from doing more thinking.
Of course, I really am writing for myself, because there is no other basis for action. I'm writing because I hope that someone will someday stumble on these ideas, and they will make a difference – that I will have added in some small, enduring measure to the knowledge of mankind. If the arguments I make are less-than-robust, I hope for someone who can take and fashion from them arguments that leave their greatest opponents defenseless. In that case I hope for a great composer to make a symphony from my folk tunes. If the arguments are robust, but the number of references lacking and the consideration of other points of view academically inadequate, I hope for a young person that has the time and energy to fill the gaps.
Although I must say that I feel frustration at the lack of an academic audience, I do not think of it as a conspiracy. The academics I mentioned are honorable and have no ax to grind in my case. It is simply the way of the world coupled with the fact that I came to what I think are interesting conclusions so late in life. After years of being a thought consumer it is difficult, if not impossible, to become recognized as a thought producer.