Tag: mises

On Chomsky: Are Libertarians Just Senseless Utopians?

Mason Mohon | @mohonofficial

The libertarian tradition has been slowly but steadily growing in the United States since the 1970s. From Rothbard to Gary Johnson and from Ron Paul to John McAfee, the movement has been kept alive. Yet obviously, the libertarian social order doesn’t yet exist. The theoretical foundation is already here. Libertarians know what they want broadly speaking. The pragmatics of libertarianism, though, are in their infantile stage. Chomsky seems to think this is because libertarians believe in a senseless utopia.

Continue reading “On Chomsky: Are Libertarians Just Senseless Utopians?”

Advertisements

Mises PAC Launches to Support Libertarian Candidates Across the U.S.

Michael Heise | United States

Today marks a historic day in the Libertarian Party and the Liberty movement! While some people counted out the Libertarian Party Mises Caucus after the 2018 national convention, we have been working diligently to grow our influence and our body of work. Spurred on by an endorsement by Ron Paul, and a slew of popular libertarian podcasters joining the LP, the LPMC now boasts over 40 organizers across the country.

Continue reading “Mises PAC Launches to Support Libertarian Candidates Across the U.S.”

An Introduction to Time Preference

Jack Parkos | United States

Suppose someone offers to pay you 20 dollars. You have the choice to receive the money today or tomorrow. In choosing the former, you are like everyone else. You would prefer wealth sooner rather than later. This economic concept is Time Preference. Time Preference affirms that current satisfaction is preferred over future satisfaction. People would prefer not to wait for wealth when it is easily achievable now. Wealth could be monetary, assets, experience, etc.

“Satisfaction of a want in the nearer future is, other things being equal, preferred to that in the farther distant future. Present goods are more valuable than future goods” – Ludwig Von Mises

However, the choice is not always equal and simple. Suppose someone offers you 20 dollars today, or 30 dollars tomorrow. The choice becomes a bit more complicated. We see a divide in people with high time preference and those with low time preference. Someone with high time preference puts their focus on their present well being. They would take the 20 dollars today. On the other hand, A person with low time preference puts emphasis on future satisfaction. This person would take 30 dollars tomorrow. A good example would be comparing savers and spenders. Those with low time preference tend to save their money and make wiser investments. Those with high time preference are more likely to blow through cash.

Real World Examples

Criminals tend to have extremely high time preferences. They are not willing to work to obtain wealth as that involves waiting for future wealth (paychecks). They would rather steal to achieve wealth in the present.

Another example of high vs. low time preference is in the context of college students. One who chooses to stay in and study over going out and partying has a lower time preference. The reasoning being, there will be a future benefit; a better chance at a higher grade, meaning better opportunities down the road. On the other hand, one who chooses to go out has a higher time preference; they prefer the instant short term gratification of partying.

Furthermore, different goods could be preferable in the future than in the present. During winter, ice has a low demand and is preferable in future (summer). However, it still is a general rule people value current wealth to future wealth.

Different groups of people tend to have different levels on time preference. Age is one of the biggest factors in determining one’s time preference. Young children tend to have high time preferences as they are not concerned with the future. A child would likely spend all of his money on ice cream. Adults tend to have lower time preference as they need to save for the future. However, The elderly tend to have higher time preference as they have less time for future consumption. Moreover, someone who has (or is planning to have) kids tends to have lower time preference as they need to save for the future.

Relation to Interest

In “Man, Economy, and State”, Murray Rothbard writes

“The time-market schedules of all individuals are aggregated on the market to form market-supply and market-demand schedules for present goods in terms of future goods. The supply schedule will increase with an increase in the rate of interest, and the demand schedule will fall with the higher rates of interest. A typical aggregate market diagram may be seen in Figure 44. Aggregating the supply and demand schedules on the time market for all individuals in the market, we obtain curves such as SS and DD. DD is the demand curve for present goods in terms of the supply of future goods; it slopes rightward as the rate of interest falls. SS is the supply curve of present goods in terms of the demand for future goods; it slopes rightward as the rate of interest increases. The intersection of the two curves determines the equilibrium rate of interest—the rate of interest as it would tend to be in the evenly rotating economy. This pure rate of interest, then, is determined solely by the time preferences of the individuals in the society, and by no other factor”.

The Time Preference Theory of Intrest explains how rates relate to one’s time preference. Demand for capital is driven by investment and the supply of capital is driven by savings. Interest rates fluctuate, eventually reaching a level at which the supply of capital meets the demand for capital.

Relationship to Civilization

In “Democracy the God That Failed”, Hans Hermann Hoppe notions that concern for future wealth is a key to the prosperity of civilization. If the majority holds a low enough time preference for the process of production, civilization would then be able to thrive. When one allows someone to use capital and resources, an economy forms with Division of Labor and private property. As previously mentioned, criminals have high time preference and will steal resources, slowing down production.

Hoppe describes that the state also has a high time preference. The state violates property rights and steals resources to give to others. The recipients in turn usually also have a high time preference. Hoppe describes this as “decivilizing”.

Time preference is arguably one of the most important parts of economic thought. It is the foundation of saving and interest. Furthermore, it distinguishes spending and saving.

71 Republic is the Third Voice in media. We pride ourselves on distinctively independent journalism and editorials. Every dollar you give helps us grow our mission of providing reliable coverage. Please consider donating to our Patreon.

Featured Image Source

Are American Libertarians Inherently Consequentialists?

Atilla Sulker | United States

At the superficial level, libertarianism is split into two main camps regarding a moral doctrine. There is the old Aristotelian natural law tradition, sometimes referred to as deontological libertarianism, which draws some of the most passionate libertarians, including the likes of Ron Paul, Andrew Napolitano, Murray Rothbard, and Ayn Rand. And there is the consequentialist (often called utilitarianism) approach to libertarianism, advocated by many pillars of libertarianism including, Ludwig Von Mises, Milton Friedman, and David Friedman. The former group believes that libertarianism is valid because initiating force in any way is morally wrong. The latter on the other hand supports libertarianism simply because, in their minds, it leads to the greatest prosperity.

But the adherence to any form of libertarianism in America makes for a perplexing phenomenon. America has the greatest total wealth in the world and is the hallmark of the great machine that is capitalism. Surely there is some amount of freedom in America, despite the squabbles of libertarians. If not, the great works of entrepreneurial enterprise and competition would not be present to provide the average American with such goods as cars and electric ovens, products once classified as “luxury goods”.

Yet at the same time, the State tramples on the liberties of its citizens every minute. Wiretaps are initiated whenever the president feels like doing so. The state drafts young men to fight in territories unknown to them, showing how frugal its citizens are in its menacing eyes. Bureaucrats interfere with progressive efforts espoused by communities to take back control of their schools. Mandatory minimums tear apart families and lead to the mass incarceration of individuals who are supposedly detriments to society. Regardless of how you assess this claim from a moral standpoint, the argument could be strongly made that government in this day in age has become a far greater detriment to society than any drug lord.

Despite the mass regulations enforced by the state, the great bulwark of capitalism cannot be stymied. Sure, competition is slowly dying off and the Fed creates a false illusion of the growth of prosperity. But despite the destruction created by the Keynesian saga, prosperity still thrives to a much greater extent in America than most other nations around the world, further validating the extent of the notion that entrepreneurship drives the improvement in the material quality of our lives. Indeed the machine of entrepreneurship is far more powerful than the government. The great technological revolution of the late 20th century shows how the hindrances established by the government could not stop the glorious consequences of a market economy.

Now here’s a head-scratcher. Does an increase in the quality of goods in the market due to competition in the private sector necessarily signify an increase in liberty? Does a vibrant capitalist economy necessarily fall in line with a free world? Quite obviously not, as our country represents a good case study of this seemingly paradoxical phenomenon. But only superficially does it occur to be perplexing, for going beyond the layer of gloss shows that the situation is not that complicated.

A larger amount of wealth simply means a larger amount of capital for the state to exploit in its nefarious affairs. It means government simply has more wealth to steal and hence more wealth to fund the welfare-warfare state. This is evident with such tragedies as the growth of the military industrial complex and the bureaucratization of education. Lew Rockwell sums up this phenomenon:

In reality, the State is far more dangerous in a productive, capitalist society than it is in an impoverished, socialized society, simply because it has far more private resources to pillage and loot for the State’s own benefit. Availing itself of the vast fruits of private production, the State engages in self-aggrandizement, expansion, and, inevitably, imperialism.”

In retrospect, we see that much of the past imperialist adventures were supported through the exploiting of private capital, e.g. FDR’s redirecting of resources to support World War Two, or the rapid proliferation of nuclear arms during the Cold War. Indeed a capitalist economy could well be a catalyst for the expansion of the state. And more importantly, a desensitized public needs to be conditioned to express obedience. Think of the state as a block of sodium and the capitalist economy and obedience as a tub of water. Without the water, the sodium remains stable, but when put in the water, it becomes volatile. This is how the state works, it works parasitically- the more blood there is to suck, the bigger it becomes.

Comparing the United States to a garden variety third world country, we discover something interesting. While the former professes to be the beacon of the free world, it is so bloated and volatile that it tramples on the liberties of its people daily. The latter advertises itself as a monstrous entity that will drop the guillotine on any dissenters but is often so poor that it can’t actually enforce these codes.

Regardless of what a country’s government may proclaim itself to be, whether a slaughterer of masses or a liberator of worlds, to truly judge how free it is, we must focus on the actual situation of the country, i.e., the effectiveness of its means in realizing its desired ends.

Economic historian Robert Higgs adheres to this view, and used it to make a case for leaving the United States in search of another country. In a speech he gave, Higgs said:

If I were in your position, I would consider seriously getting out of this country, not because I think any other country is a paradise by the way. But because I think no other country has the means (emphasis added) that the government of this country has to carry out these horrifying surveillance programs, and other measures of state tyranny. So, I’m going to move. I’d suggest you might consider moving somewhere else.”

Higgs himself moved to Mexico in October of 2015.

So if one proclaims himself to be a natural rights libertarian, wouldn’t he be contradicting this assertion if he continues living in the United States? Natural rights libertarians are defenders of liberty even if it leads to economically inefficient outcomes. It would then follow that if they truly hold this to be true if they are truly the bleeding heart natural rights supporter that they claim to be, they would move to another country that does not have the means to enforce such control as our own.

I don’t believe that any libertarian can be classified as fully of the natural rights tradition or fully a consequentialist. Surely a consequentialist would become inclined to believe in some sort of natural rights if the government began to kill members of his family. He wouldn’t oppose it only on the grounds that it disturbs order and leads to disutility.

Now certain issues may invoke a more natural rights based defense. Such issues may include abortion and the defense of the second amendment. It would be hard not to be rooted in the natural law tradition to an extent, yet be an ardent supporter of the second amendment or the right to life.

Based on the actions of libertarians here in America however, on the economic front, the consequentialist doctrine trumps any belief that they may have in natural rights, not fully, but to an extent that libertarians have decided to stay here rather than follow the Higgsian vision. It would be foolish to try and sit here and say that we would defend liberty even if it didn’t lead to economically sound outcomes, yet live in a country in which the means to the destruction of liberty are far greater than most any other country in the world.

It is clear that we enjoy the fruits of entrepreneurship and capitalism as present in this country. For the American libertarian, the loss of this great prosperity in exchange for a more free lifestyle is not a convincing trade-off. Let’s face it, we all enjoy the constant new innovations in technology, in medicine, etc. We wouldn’t be willing to give up our cellular devices or our polio-free bodies in exchange for a more libertarian way of going about our lives.

America can be seen as a coin, having a free side to it, and an unfree side. As Lew Rockwell explains:By way of illustration, in the US today, we have two economies, one free and one unfree. The free one has given us the great abundance of consumer goods, the widest distribution of wealth, and the fastest pace of technological innovation known in the history of man. The unfree one—characterized by the two trillion dollar federal budget and the more than one-quarter of that spent on apparatus that builds and administers weapons of mass destruction—has produced what we have been reading about in the headlines for the last two months. Military Socialism, which exists by pillaging the free economy, is responsible for a brutal and immoral war on a civilian population halfway around the world—the destruction of hospitals, churches, nursing homes, residential neighborhoods, and town squares.”

So yes, it is the prosperity in the capitalist economy that keeps us here in this country. It is the reason why we enjoy the economic freedom present in this country. The atrocities committed by our government won’t drive us away, but the market economy keeps us latched. It thus follows that the American libertarian is inherently, to an extent, a consequentialist.


71 Republic is the Third Voice in media. We pride ourselves on distinctively independent journalism and editorials. Every dollar you give helps us grow our mission of providing reliable coverage. Please consider donating to our Patreon.

Featured Image Source

How I Became An Austrian Economist

Jozef Martiniak | Slovakia

In March of 2018, I attended a seminar on Austrian economics in Slovakia that was organized by an institute whose statements I had been following for a long time. The event lasted four days with lectures on economics, money, and business cycle theory among other things, and the statements made seemed consistent to me. The rhetoric remained the same – what was said ten years ago was still relevant to today.

Moreover, these views have somehow all given awareness to me, a man with common sense. Suddenly you find out that something that you feel intuitively has a 150-years-old historical tradition and that there is a school that studies and develops this tradition.

Surprisingly, the majority of the attendees ended the seminar with a conviction against Austrian economics, but I experienced a change. Out of the blue, I became an Austrian. My ideas were synthesized and I found out it all makes sense. I used to talk about this moment like the story of St. Paul’s fall off of his horse. It was a moment after which you start looking at the world through different eyes and you know it will never change, you will never get back. You start to realize the connections in everyday situations. Not long ago, you have not seen them, but now you can clearly. Tom Palmer says that suddenly you look at the world through the lenses of freedom, through a filter that the majority of people do not have.

You start to become aware that this change is not so obvious like you feel it is. You have a feeling that everybody must see it, so you control yourself, you dose your knowledge to people around you just in bits. Then you find out that people around you do not care about you at all and most of them have not noticed any change in you, they are preoccupied by their own problems.

The impression that you understand the world better is followed by the impression that people will not understand you anymore. Suddenly, it is clear to you how some things will end up, because you distinguish responsibility from irresponsibility. And that is what really irritates the eminent experts who somehow see the change happening in you, though they do not know what has happened, they just see that you can say something responsibly and hold your ground, because you simply know it is true. They do not like debating with you because instead of trying to understand your point of view, they focus on trying to humiliate you in rhetorical competition.

A side-effect of the “conversion” is that you suddenly start to understand the Idealists whom you did not understand before.

Hazlittian awareness of invisible consequences of the events that already happened is another consequence of the ‘conversion’. Only few people realize it. Most people simply analyze their lives and only see the closest area of consequence of the acts that happened and that are related to their past.

In the summer of 2018, I completed a course at Mises University and henceforth joined a sect of people with an Austrian point of view in economics. I have used the word “sect” on purpose since we fit into the characteristics of the word ‘sect’ – we are in minority, we look at the others like those who do not understand yet, but if they are insistent, they will find out where the truth is. The lecturers at the Mises Institute say we belong to the two percent of the population who understands economics better than the majority. Even if it is said as a joke, it seems to me inappropriate since those who really understand the nature of Austrian economics know that they really belong to that small percentage. And those who do not understand are uselessly given a false feeling of exceptionalism, because they do not know why and in what they should be exceptional.

I like working in a world where your steps have meaning. Since we are homo sapiens, we should stop and think about future consequences of our present actions. The economists of the mainstream cannot explain how debt of countries will impact their future. They cannot explain how long the FED and ECB control will work and the public will trust it. In these aspects, they have adopted Austrian rhetoric of “laissez faire” – let it be, it is working somehow.

The Austrians are not satisfied with an explanation that it will work out somehow, because everything has always ended up working somehow. They want to change this system – even though it is very corrupted – so that it is the furthest possible from disaster. I do not know how other Austrian economists came into existence, perhaps they were born like this (at least Carl Menger, as he was nobody’s pupil and he was quintessential to the marginal revolution), but I am for sure a convert.


Get awesome merchandise. Help 71 Republic end the media oligarchy. Donate today to our Patreon, which you can find here. Thank you very much for your support!

Featured Image Source