Tuesday, January 27, 2009

Good analogy!

From the commenter "Fundamentalist" on this Mises Blog article:
The “animal spirits” cliché is not an explanation; it is merely a description of the human condition. Keynes invented the term because he didn't want to think about the reasons businessmen do what they do. It was his way of just dismissing the whole topic as unworthy of his time and attention. And if unworthy of his time, then by implication unworthy of anyone else's effort.

Animal spirits are no different as an explanation than is greed. Both may describe human behavior at the moment, but they don't explain anything. Especially they don't explain why animal spirits and greed only cause problems roughly every eight to ten years. Otherwise, those common human traits seem to be under control.

Someone has said that it’s like blaming gravity for airplane crashes. Yes, gravity played a role, but the real question is why gravity was more effective just before the crash that it was during take off or normal flight. In the same way, proponents of animal spirits, greed, etc., must explain why those normal human traits were more effective just before the current depression than during the former 6 or 7 years of growth. The answer is in the Austrian Business Cycle Theory.*

*That's a link to a lecture (MP3) by Paul Cwik on the FEE audio site that I thought was especially clear and rather entertaining - the guy talks like a surfer (he's from North Carolina).

Friday, January 23, 2009

Thursday, January 22, 2009

Do I write this badly?

I hope not. [Update: Manfred Schieder's first languages are German and Spanish. Sorry I didn't check that before I wrote this. In that case, his English is much better than my German and, at least sometimes, my English.]

From Preparing for Capitalism, by Manfred F. Schieder:
By no means must any of the many worldwide existing types of collectivism be copied nor must those whose purpose is the establishment of the new type of society act, as collectivists usually do to reach their purposes, like a wild steer on the loose in a glass-shop. The technique to be used by the defenders of Capitalism must be very different, since our purposes are different as well. Against collectivists, who are interested in reaching sheer power, which is an evident sign of despotism, liberals are interested in production, a sign of personal liberty and a constant move towards general well-being. Hence, whoever thinks that he can enter any compromise with the antagonist or copy a certain "technique" of his, commits a contradiction in terms.

It is an example of bad writing, but he has a good excuse, and I think he's saying something important.
Now, whoever takes even just one instant of his time to study the tangle of laws, decrees, regulations, fidelity oaths and rules of behavior, will immediately notice that the total sum of the labyrinth was not established, through the millennia, to insure the freedom of the individual citizen but to protect government from him and insure its predominance and continuous enlargement.

Ayn Rand provided the sustaining argument for what I described above in her major work "Atlas Shrugged": "The only proper purpose of a government is to protect man's rights, which means: to protect him from physical violence. A proper government is only a police officer, acting as an agent of man's self-defense, and, as such, may resort to force only against those who start the use of force. The only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders; and the courts, to protect your property and contracts from breach or fraud by others, to settle disputes by rational rules, according to objective law. But a government that initiates the employment of force against men who had forced no one, the employment of armed compulsion against disarmed victims, is a nightmare infernal machine designed to annihilate morality: such a government reverses its only moral purpose and switches from the role of protector to the role of man's deadliest enemy, from the role of policeman to the role of a criminal vested with the right to the wielding of violence against victims deprived of the right of self-defense. Such a government substitutes for morality the following rule of social conduct: you may do whatever you please to your neighbor, provided your gang is bigger than his is."

Schieder is calling us to train in administration for the day when the current mess goes completely to $#!*.

Wednesday, January 21, 2009

Lincoln's Emancipation Proclamation did not free any slaves

I write this in support of Walter Williams, who has come under attack for making the same statement today. Read the document and study up on who controlled what at the time he wrote it.

From Wikipedia:
The Emancipation Proclamation consists of two executive orders issued by United States President Abraham Lincoln during the American Civil War. The first one, issued September 22, 1862, declared the freedom of all slaves in any state of the Confederate States of America that did not return to Union control by January 1, 1863. The second order, issued January 1, 1863, named the specific states where it applied.

The Emancipation Proclamation was widely attacked at the time as freeing only the slaves over which the Union had no power. In practice, it committed the Union to ending slavery, which was a controversial decision even in the North. Lincoln issued the Executive Order by his authority as "Commander in Chief of the Army and Navy" under Article II, section 2 of the United States Constitution.

The proclamation did not free any slaves of the border states (Kentucky, Missouri, Maryland, Delaware, and West Virginia), or any southern state (or part of a state) already under Union control.[1] It first directly affected only those slaves who had already escaped to the Union side. Hearing of the Proclamation, more slaves quickly escaped to Union lines as the Army units moved South. As the Union armies conquered the Confederacy, thousands of slaves were freed each day until nearly all (approximately 4 million, according to the 1860 census[2]) were freed by July 1865.
Abolitionists had long been urging Lincoln to free all slaves. A mass rally in Chicago on September 7, 1862, demanded an immediate and universal emancipation of slaves. A delegation headed by William W. Patton met the President at the White House on September 13. Lincoln had declared in peacetime that he had no constitutional authority to free the slaves. Even used as a war power, emancipation was a risky political act. Public opinion as a whole was against it. There would be strong opposition among Copperhead Democrats and an uncertain reaction from loyal border states. Delaware and Maryland already had a high percentage of free Negroes: 91.2% and 49.7%, respectively, in 1860.

My emphasis; Lincoln and most Northerners didn't want free blacks "in their own backyards," at best most whites wanted the blacks returned to Africa. The act did have some unforeseen, unintended consequences:
In the military, reaction to the proclamation varied widely, with some units nearly ready to mutiny in protest. Some desertions were attributed to it. Other units were inspired by the adoption of a cause that ennobled their efforts, such that at least one unit took up the motto "For Union and Liberty".

This, however, was the hoped-for consequence:
Slaves had been part of the "engine of war" for the Confederacy. They produced and prepared food; sewed uniforms; repaired railways; worked on farms and in factories, shipping yards, and mines; built fortifications; and served as hospital workers and common laborers. News of the Proclamation spread rapidly by word of mouth, arousing hopes of freedom, creating general confusion, and encouraging thousands to escape to Union lines.

And I doubt that anybody expected the scale of this:
The Emancipation Proclamation also allowed for the enrollment of freed slaves into the United States military. During the war nearly 200,000 blacks joined the Union Army and most of them ex-slaves. Their contributions gave the North additional manpower that was significant in winning the war. The Confederacy did not allow slaves in their army as soldiers until the final months before its defeat.

The histories of Lincoln have been written in the spirit of "Yeah... I meant to do that." Hagiography is not history.

I'll read some more of those comments now. Btw, if the war came to be about slavery (for the fighters and public) after the Emancipation Proclamation, what the hell was it about before that? Why was quashing secession so important when we weren't under attack by anyone?

I say it was about taxes, and Lincoln was George III.

Update: commenter Koolmuse is an interesting character: he attacks American corporatism (which he calls global capitalism), but he defends Lincoln, who killed 600,000 Americans to enthrone his beloved American System of economics.

Sunday, January 18, 2009

Friday, January 16, 2009

I suppose I gotta mention this.

James Watt: Monopolist. The authors contend that patents are evil.

Since I wrote that article about him awhile back. [Oh, crap! I need to manually update my archives.]

Anthony Gregory

discourses on Reaching Out to the Left:
One thing that the Left should understand, but which we need to understand too if we want to explain it, is the profound ways in which big government actually advances big business and tramples over small entrepreneurs, fixed-income earners, and the working poor. An important book by leftist historian Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History (1963), explains how corporate leaders in industry pushed for new regulatory agencies so as to help entrench themselves in a regulated market and bust their competition. This was also true during the New Deal (the head of General Electric was instrumental in the design of Roosevelt’s infamous National Recovery Administration, for example), during the Great Society, and today as well. Often, it is the very interests being regulated who benefit most from the regulation.

One of the greatest big-government tools of corporatism is central banking. By inflating the money supply and giving the freshly printed dollars to its cronies in big banking, big business, and the military-industrial complex, the government effectively redistributes money from the poor and middle class to certain segments of the rich, who get the money first, before prices can adjust. By the time the people lower on the economic ladder get it, prices have gone up. Inflation is therefore a hidden tax and a regressive one at that.

There are other blatant ways big business benefits from big government. Eminent domain has increasingly and famously been used to seize private homes and businesses and give the property to big stores such as Costco. The local governments get more tax revenue and the companies more profits — again illustrating the connection between government power and corporate privilege. Minimum-wage laws and other regulations tend to benefit bigger businesses, which is why such corporate fat cats as the Wal-Mart CEO often favor them. Bush’s prescription-drug program, the biggest expansion in welfare benefits since the Great Society, has also amounted to an explosion of corporate welfare for the pharmaceutical industry.

Wednesday, January 14, 2009

No, no parallels at all.

That's my reaction after reading this article at Whiskey and Gunpowder. Now I know how the American Whig Party got off misappropriating our handle.

There is a great article on Deficits and Spending

by Henry Hazlitt, What Spending and Deficits Do, on the FEE's The Freeman Online website.

Note the fact that you can download last month's Freeman as a pdf there for free. Actually, it looks like they've got the whole issue right there on their front page. There's Walter Williams and John Stossel... And is that the article I linked a while back about Adam Smith (or did I link something else)? It's a good one: Mr. President, meet Mr. Smith.

Oh, I forgot. I wanted to say that the last one explains how Smith is hardly an advocate of British Mercantilism, as I've heard and read trolls in fora and talk radio say.

Monday, January 12, 2009

I haven't forgotten Kevin Carson

If I'm not mistaken The Center for a Stateless Society is new. The website, anyway. Kevin says here:
I think this highlights the problems of equating “capitalism” to “the free market.” In neoliberal orthodoxy, supposedly, labor and capital are just coequal “factors of production.” So why name an economic system after one of the factors of production, in particular? What we’re seeing is that, beneath the ideological veneer of “free contract” and all the rest of it, some “factors of production” are more equal than others. That’s why, when Costco pays its workers above-average wages for the retail industry, business analysts squirm with the same undisquised moral disapproval that some people reserve for diamond-studded dog collars. But when a Bob Nardelli or Carly Fiorina gets a retirement package worth tens or hundreds of millions, after gutting their companies to massage the quarterly numbers and game their own bonuses and stock options, that’s just the way “our free enterprise system” rewards them for “the value they created.”

What the politicians and journalists are for, behind all the “pro-market” rhetoric, isn’t the market at all. It’s the interests of capital.

What we need is the genuine article: a free market without special privileges or artificial scarcity, without subsidies and corporate welfare, and without market entry barriers and other protections against competition. Of course, if we had that kind of free market, there wouldn’t even be a General Motors.

I read somebody the other day who was astounded at the apparent Georgist tone of one of Kevin's articles. I was astounded that the guy was astounded. I believe Kevin considers his system to be an advance upon Georgism.

Oop! Better see what this says, before I say that.

Update: yup, that's worth reading. Kevin's not a Georgist, though he's content with many of their insights. Here is a really good defense of Georgism.

Tuesday, January 06, 2009

I told Probligo I would, so I gotta

I've been reading two books, biographies of Henry Ford and John D. Rockefeller called The Wild Wheel by Garet Garrett and God's Gold by John T. Flynn respectively.

Sorry, I told Prob they were both by Flynn. I also told him they'd be easy to google. They weren't. God knows how I found them the first time. The link to the first one gave me a cheat for the second one.

They're both big pdfs, btw. You can certainly feel free to buy the books from the Mises Store if you want. I've bought a number of books from them.

Flynn's one of our guys, but he was a journalist who took his job seriously. He doesn't whitewash the failings of either man - in fact he excoriates their failings - though he also shows strong admiration for their strengths.