Tag: murray rothbard

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.

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The 7 Most Important Schools of Libertarian Thought

Jack Parkos | United States

When people think of libertarians, they often tend to think “fiscally conservative and socially liberal” or “a Republican who likes weed”. However, neither of these statements are fully true. The libertarian philosophy actually goes very deep; in fact, there are several factions of different libertarian schools of thought. The libertarian ideology is far more intellectually diverse than American conservatives and liberals. Below are some of the different major schools of libertarian thought. Though many more exist, these seven best capture the wide array of beliefs.

Classical Liberalism

Classical liberalism is one of the earliest schools of libertarian thought. Originating in the philosophy of John Locke, classical liberalism holds that all men are born with inalienable rights to life, liberty, and property and that the sole purpose of government is to protect those rights. The Declaration of Independence is an echo of classical liberal thought, as many of America’s Founding Father’s were classical liberals. Generally, they place emphasis on natural law, republicanism, and skepticism; many classical liberals are firm believers in the U.S. Constitution.

Key classical liberal figures include:

  • John Locke
  • Thomas Paine
  • Many of America’s Founding Fathers, including Thomas Jefferson and George Washington

Anarcho-capitalism

Anarcho-capitalists base their philosophy on the moral principle called the “Non-aggression Principle” (NAP). The basis of the NAP is that people do not have the right to initiate force against others. On the contrary, the only acceptable use of force is in self-defense. They also believe that the mere existence of the state violates the NAP, as it acquires all its income through coercive means (taxation). Thus, they believe that no government should exist. Instead, they believe that voluntary communities and private entities should fill the government’s role.

Key anarcho-capitalist figures include:

  • Murray Rothbard
  • Hans Hermann Hoppe
  • David Friedman

Minarchism

Minarchism basically falls in between anarcho-capitalism and classical liberalism. It holds many similar beliefs to anarcho-capitalism but criticizes the idea of a lack of government. Minarchists believe that the free market can cover almost all government programs. However, they maintain that a minimalist government is necessary for the protection of rights. Minarchists typically believe, with some variation, that government should be limited to a “Night-watchman State” consisting of police, military, and courts. Robert Nozick, author of “Anarchy, State, and Utopia” argued that out of anarcho-capitalism, minarchism would naturally arise, as monopolized private police and courts would form a “state” of sorts.

Key minarchists include:

  • Robert Nozick
  • Friedrich Hayek
  • Ludvig Von Mises

Objectivism

Objectivism is a philosophy that author Ayn Rand outlines in her books “Atlas Shrugged” and “The Fountainhead”. To begin with, objectivism is an extreme Laissez-faire capitalist belief with huge emphasis on individualism. Rand believed that man was best off serving his own self interest and should not need to help out the needy. In addition, it describes the pursuit of one’s own happiness as life’s most important goal. Accordingly, she, like many objectivists, rejected selflessness and altruism as an inefficient direction of resources.

Key figures in the Objectivist movement include:

  • Ayn Rand
  • Leonard Peikoff

Bleeding Heart Libertarianism

Bleeding Heart Libertarians can be considered more “moderate” libertarians. In some cases, they are associated with the libertarian left. The official site for bleeding heart libertarians says they believe in “free markets and social justice“. Bleeding Heart Libertarians tend to believe in social equality and egalitarianism. They often still believe in social safety nets and a welfare state, and fall on the progressive side on social issues.

Arguably, the most famous bleeding heart libertarian is Gary Johnson. Much of the moderate side of the Libertarian Party also falls under this category.

Libertarian Socialism

Libertarian socialism is a form of left libertarianism. Typically, it is a form of Marxist theory that believes in social liberties and limited to no government. However, they also support a voluntary sharing of resources in a communal way. They also tend to oppose the power of strong corporations and hierarchies. Libertarian socialists often believe capitalism to be a tyrannical force and compare the “economic” elite to the state. As a result, they believe in ending authoritarianism and bringing in systems of direct democracy (sometimes unanimous) that distribute wealth more evenly.

This mode of thought draws much criticism from most other branches of libertarianism. Conversely, many libertarian socialists firmly believe themselves to be the only true libertarians. This partly dates back to the origin of anarchism and libertarianism in 19th-century Europe as a term to describe the left.

Key libertarian socialists include:

  • Emma Goldman
  • Peter Kropotkin
  • Noam Chomsky

Paleolibertarianism

Paleolibertarians believe that while the state should be limited or abolished, society should still hold culturally conservative views. Paleolibertarians are thus very supportive of Western and American culture and are concerned about threats to it.

The paleolibertarian movement began in the 1990’s as a coalition of paleolibertarians and paleoconservatives that Rothbard (above) and paleoconservative presidential candidate Pat Buchanan formed. Basically, the goal was to stop interventionism, globalism, and social democracy.

Paleolibertarians usually oppose mass immigration and foreign wars. Many more radical paleolibertarians may consider themselves “Hoppeans”, following the anarcho-capitalist philosophy of Hans Hermann Hoppe.

Key paleolibertarians include:

  • Murray Rothbard
  • Lew Rockwell
  • Hans Hermann Hoppe
  • Ron Paul
  • Tom Woods

The movement, of course, is even more diverse than this. Countless versions of libertarian thought exist within it, and it would take ages to explain them all. Without a doubt, the area of thought is rich with diversity and variation. No two libertarians are alike, but all have one thing in common: a desire to live free.


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Hatred and Polarization Has Ruined Politics

Ian Brzeski | United States

Politics, in essence, is the art in which people are involved with changing or guiding government policy. The majority of the population detests politics mainly due to the recent extreme polarization of the political spectrum. The left hates the right and vice-versa. People have forgotten how to argue and have resorted to slander to try to make themselves feel good about whatever it is that they are claiming.

The polarization of the political spectrum has led people to believe that there is a hierarchical standing associated with politics. People everywhere on the political spectrum think that whatever they believe in is correct. Now there is nothing inherently wrong with that, but where it starts to get dangerous is when people begin to dehumanize the other side which will inevitably lead to hatred for others.

Unwilling and Unyielding

This all comes from people’s unwillingness to learn and view other viewpoints. Take Ben Shapiro for example. I have no doubt in my mind that Ben is a brilliant man. He is intelligent, knowledgeable, and knows how to win his arguments. I agree with him on specific issues, but I also disagree with him on a multitude of others. The problem that I have with Ben is not where I disagree with him, but it is where I can see that all he really cares about is winning his argument. Ben goes into every single discussion thinking that he is already right. He does not want to learn or take anything away from a debate. Arguments should not be about winning. They should be about learning or gaining a sense of understanding from other perspectives.

Going into an argument thinking that your mind cannot be changed is honestly the worst thing a person can do. Nothing good is going to come out of that argument, only hatred and further polarization. Due to this, constant generalizations about people of their respective political standing which will only lead to slander and dehumanization. It is so feeble-minded how conservatives hate liberals and liberals hate conservatives solely based on their politics. When this hatred in politics arises, people are quick to resort to slandering their opposition, and it is horrible to look at. It is dehumanizing and frankly extremely childish. It is not even just conservatives and liberals; it includes every single area of the political spectrum, including libertarians. People need to start attacking ideas in arguments and not the people themselves.

A Riff Caused by Hatred

People hate each other in politics for no rational reason. Everywhere I look on social media, I see many conservatives who think every liberal is a crying “snowflake” who kills babies, wears vagina hats and is a member of Antifa, and many liberals who believe every conservative is a racist, misogynist pig who enjoys mass shootings and sexual assault. Yes, maybe there are some extreme rarities on both of these sides that people fall under, but in no way whatsoever is this the case. It would be incredibly idiotic to think so.

Some of the worst childish banter comes from libertarians themselves. You have the libertarian infighting where many libertarians think some libertarians are not libertarian enough. You also have the opposite of this where many libertarians believe that there are libertarians who are too radical. Some libertarians want no government at all, and others still believe in some form government, a minimal government, however. It is honestly weird that there is so much tension between these two sets of libertarians despite having near similar beliefs especially since the political system we have in place today is nowhere near the realm of any form of libertarianism.

Libertarians not only hate each other, but they also hate other groups even more. To many libertarians, if you are not a libertarian, you are probably a statist pig who hates our freedoms. Just like how not every conservative is a racist and how not every liberal is a snowflake, not every non-libertarian hates your freedoms. These straightforward generalizations that people make towards other political groups are abnormal, to say the least, and has led to a deep hatred towards others. The legitimate hatred for others based on political views is exceptionally pathetic, almost as pathetic as hating somebody because they are a supporter of another sports team.

This hatred has led to so many people not knowing why they like or dislike a political candidate or why they are Republican or Democrat or Libertarian. They only vote for specific candidates or align with specific political parties because they are quick to make generalizations about the other side. They don’t try to read about opposing viewpoints or learn why people hold opposing views because they already believe that they are inherently right or maintain the moral high ground. This all stems from people’s unwillingness to learn and hear new ideas. People need to go into arguments willing to learn or get something out of it, not to just go into arguments trying to win. In my eyes, a genius of a person unwilling to learn is way less respectable than a less intelligent person who strives to learn.

Politics is literally just people trying to figure out what they think would be best for everybody. Conservatives, liberals, libertarians, independents, socialists, communists, objectivists, anarchists, and many others are not inherently evil people. These people are generally well-meaning people who want the betterment of society. There is really not that much more to it. So stop hating people based on their political ideology and start reading and learning about why people believe in what they believe. You are going to remain stupid and ignorant if you do not have a proper understanding of other ideologies.

If you are a socialist who likes to hate on libertarians but has never read Hayek or Rothbard or Bastiat for example, then you have no right to hate on libertarians at all. This also goes for libertarians who have not read any books or articles from any great socialist thinkers or authors. This goes for every single person who is invested in politics. Read as much as you can so you can obtain the most knowledge. Read so you can formulate your ideologies to the best of your ability because if you don’t, you really shouldn’t be engaging in political discourse at all.


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Libertarians Must Defeat the Left: A New Strategy.

By Jack Parkos | United States

Recently, I wrote on the importance of right-wing unity. This will serve as a follow up to that piece; it is important to go into further detail about why this is essential for society to prosper.

What Is the Left?

Two main groups make up the threat of the left. First of all, there is a wave of modern Marxists. These are the groups like Antifa, who want to bring down capitalism and the social order. According to them, capitalism oppresses various groups like women, minorities, and the LGBT community. As they want to see the end of free markets, they are not friends of liberty.

The other main threat of the left is the elites. These are often crony capitalists in positions of high power and influence. These people feed the previous group of Marxists, even if they differ from them. They also tend to support wars and do shady business behind the backs of the general public. In many cases, they have a monopoly on the media and education. Both elected and appointed, elites use big government against the people. They have infected both parties. Establishment Republicans may speak against left groups like Antifa but are as pro-war as the left elites.

Together, the establishment and Marxists are a deadly weapon in politics, culture, and society. They are a threat to liberty. Antifa advocates for an ideology (communism) that opposes private property. They both are against free speech. Antifa does this via riots when conservatives speak.

It is time that libertarians adopt a strategy to stop this. Principles are dying in politics; mobs are filling the void. Trying to reason with the left will not work; they are unable to peacefully come to resolutions. We have crazy enemies in the media, establishment, left and more. The old saying goes “desperate times call for desperate measure”. But we may not need to come up with a completely new strategy, there exists already an idea that, if adapted to modern times, could serve as a solution.

Right-Wing Populism

Murray Rothbard was the father of both Anarcho-Capitalism and Paleo-Libertarianism. An anarchist, of course, believes in no government and consequently, no politics. But Murray Rothbard, while believing in an ideology that would end politics, paid very close attention to modern politics. Not only that: he participated in it. This would be shocking to some anarchists, but Rothbard knew this was necessary to advance the movement.

In 1992, Murray Rothbard published a controversial essay entitled “Right-Wing Populism”. Although the essay contains some horrid ideas (such as allying with white nationalists), some parts of this essay are a good guide for how to approach modern politics. It is very important that we (libertarians) condemn white nationalists. Once we remove this portion of the essay, what does it say?

Rothbard presents an interesting idea, that with a new approach, could be beneficial. He writes:

The basic right-wing populist insight is that we live in a statist country and a statist world dominated by a ruling elite, consisting of a coalition of Big Government, Big Business, and various influential special interest groups. More specifically, the old America of individual liberty, private property, and minimal government has been replaced by a coalition of politicians and bureaucrats allied with, and even dominated by, powerful corporate and Old Money financial elites (e.g., the Rockefellers, the Trilateralists); and the New Class of technocrats and intellectuals, including Ivy League academics and media elites, who constitute the opinion-moulding class in society.

Rothbard described the right-wing populist movement as an “old right” that opposes big government and corporate unity. Many of the things he talks about apply to problems we face today. We are under a crony capitalist system that elites run without care for the people, and this must cease.

Allies of the Right

Cultural Marxists and elites work towards similar goals that lead to the weakening of society. Given this, it becomes abundantly clear that libertarians need allies, even if they are not pure lovers of liberty. Given the modern state of politics, this is absolutely necessary. Rothbard supported the idea of allies. But who do we choose? Rothbard makes a great point in his essay:

Libertarians have long been puzzled about whom, about which groups, to reach out to. The simple answer: everyone, is not enough, because to be relevant politically, we must concentrate strategically on those groups who are most oppressed and who also have the most social leverage.

So, who opposes the left and elite and has the leverage to help us win? Donald Trump’s populist movement. Before throwing away this idea, it is important to look at it deeply. It is nearly obvious that Rothbard would have liked this idea. Rothbard supported Pat Buchanan, someone who is not a 100% pure libertarian. If he were around in the 2016 election, it is extremely likely he would have supported Trump.

A Voice Against the Establishment

Trump did run an anti-establishment campaign, calling out the coalition of bureaucrats and politicians that Rothbard also criticized. Take a look at these proposals below. Who does this sound like?

l. Slash Taxes. All taxes, sales, business, property, etc., but especially the most oppressive politically and personally: the income tax. We must work toward repeal of the income tax and abolition of the IRS.

2. Slash Welfare. Get rid of underclass rule by abolishing the welfare system, or, short of abolition, severely cutting and restricting it.

3. Abolish Racial or Group Privileges. Abolish affirmative action, set aside racial quotas, etc., and point out that the root of such quotas is the entire “civil rights” structure, which tramples on the property rights of every American.

4. Take Back the Streets: Crush Criminals. And by this I mean, of course, not “white collar criminals” or “inside traders” but violent street criminals – robbers, muggers, rapists, murderers. Cops must be unleashed, and allowed to administer instant punishment, subject of course to liability when they are in error.

5. Take Back the Streets: Get Rid of the Bums. Again: unleash the cops to clear the streets of bums and vagrants. Where will they go? Who cares? Hopefully, they will disappear, that is, move from the ranks of the petted and cosseted bum class to the ranks of the productive members of society.

6. Abolish the Fed; Attack the Banksters. Money and banking are recondite issues. But the realities can be made vivid: the Fed is an organized cartel of banksters, who are creating inflation, ripping off the public, destroying the savings of the average American. The hundreds of billions of taxpayer handouts to S&L banksters will be chicken-feed compared to the coming collapse of the commercial banks.

7. America First. A key point, and not meant to be seventh in priority. The American economy is not only in recession; it is stagnating. The average family is worse off now than it was two decades ago. Come home America…

8. Defend Family Values. Which means, get the State out of the family, and replace State control with parental control. In the long run, this means ending public schools, and replacing them with private schools. But we must realize that voucher and even tax credit schemes are not, despite Milton Friedman, transitional demands on the path to privatized education; instead, they will make matters worse by fastening government control more totally upon the private schools. Within the sound alternative is decentralization, and back to local, community neighborhood control of the schools.

These are all Rothbard’s points, but some show considerable overlap with Trump.

Additional Similarities

Rothbard further details some similarities below:

So far: every one of these right-wing populist programs is totally consistent with a hard-core libertarian position. But all real-world politics is coalition politics, and there are other areas where libertarians might well compromise with their paleo or traditionalist or other partners in a populist coalition. For example, on family values, take such vexed problems as pornography, prostitution, or abortion. Here, pro-legalization and pro-choice libertarians should be willing to compromise on a decentralist stance; that is, to end the tyranny of the federal courts, and to leave these problems up to states and better yet, localities and neighborhoods, that is, to “community standards.”

A Coalition of the Right

If the father of anarcho-capitalism was open to the idea of working with “non-libertarians”, it cannot be against anarchist principles to do so. Of course, we do not have to support every idea on the list or change our principles. However, the Trump Populist Movement is a good “target” to ally with. They also could become future libertarians, as many current libertarians come from this camp. We need to put aside our differences and unite with populists. We need to find common ground and defeat our common enemy: the left.

If this alliance weakens elitism and stops the left, then there is no real reason not to consider it. Along with this, we must call out when Trump is right as well as when he is wrong. But, we need to appear friendly. Trump likes this, and if he likes us, he may ally with us and lean towards libertarian positions. Without supporting every bill or abandoning principle, we can take this new strategy. Rothbard’s thoughts on the matter are not perfect, but lay the framework for a move towards true liberty.


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The Difference Between Austrian and Chicago Economics

By Jack Parkos | United States

When it comes to economics, libertarians tend to subscribe to one of two schools of thought: The Chicago School and Austrian School. Both of these ideologies are rooting in laissez-faire capitalism and believe in the power of the free market. Yet both have unique differences between them that can divide people who believe in free market capitalism. It is important to understand the differences between the two for one to decide which school they agree with.

“Mainstream” Recognition

The Chicago School, which is sometimes called the Monetarist School, belongs to the neoclassical school of thought. It tends to get more attention from “mainstream” economists and politicians. Milton Friedman, arguably the most famous and influential economist of the Chicago School, served as an unofficial advisor to President Ronald Reagan as well as winning many awards for his books. While many Austrians have won awards for their work, they are not nearly as “popular” as their Chicago counterparts. In a high school economics course, you’re more likely to learn about Milton Friedman and Chicago economics than Ludwig von Mises and Austrian economics. Austrians are seen as outside the mainstream, meaning it is “heterodox”. Perhaps someone may be asking why this occurs.

Difference in Methods

One reason that Austrians tend to be seen as economic “outcasts” is that they tend to use different methods to come to conclusions. As stated before, Austrians are not seen in the mainstream, unlike their Chicago counterparts.

This is mainly due to the fact that Chicago economists tend to use similar methods as most other economists. Monetarists tend to use mathematics to test their theories. Chicago economists believe economics is like a science with rules that cannot be broken. Meanwhile, the Austrians believe that since the economy is based on the actions of individuals, no mathematical formulas can accurately predict how people would act. Thus, Austrians base their work on philosophy, logic, and reasoning. Praxeology, the study of human nature, is an important part of the Austrian School of economics.

Monetary Policy

While both schools criticize the Federal Reserve, they have different reasoning for it. The Chicago school calls out the Federal Reserve’s failures but still believe it should exist and be used in the right way. Monetary policy is a big part of Chicago economics, hence sometimes being called the Monetarist School. For example, Milton Friedman criticized the federal reserve for not printing enough money during the Great Depression.  Friedman also believed the monetary supply should be increased by about 2.5-3.5% each year.

Meanwhile, the Austrians do not believe the government should print more money ever. They tend to believe in a fixed supply, typically a standard based off of precious metals. The Austrians do not want the government inflating the currency at all. They blame many economic problems on government creating inflation through printing money.

 

Famous Economists

Here are some famous economists from the Austrian and Chicago schools.

Austrians

Ludvig Von Mises- Big leader and teacher of the Austrian school of thought.

Murray Rothbard- A leading pioneer of both Anarcho-Capitalism and Paleo-Libertarianism.

Frédéric Bastiat- Developed the concept of opportunity cost.

Chicago

Milton Friedman- Won Presidential Award for Freedom, possibly most famous Chicago economist.

Thomas Sowell- National Humanities Award winner, theorist on welfare economics.

Gary Becker- Awarded Nobel Memorial Prize in Economic Sciences.

Friedrich Hayek (who also belonged to the Austrian School) – Award-winning economist who contributed to the Business Cycle Theory and The Economic Calculation Problem.


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