Tag: praxeology

Libertarianism is not Self-Destructive or Unsustainable

By Mason Mohon | @mohonofficial

A recent article by an unknown guest contributor on the Bilan Report suggested that a libertarian society is unsustainable for various reasons. Among these are the ideas that all personal freedom leads to libertinism, individualism is incompatible with the NAP (non-aggression principle), and the supposed libertarian assumption that all governance is bad. The author makes many misconceptions about libertarianism in their article. In response, this piece attempts to set the record straight on libertarian philosophy.

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Milton Friedman: One of the Great Libertarians

By Roman Bilan | United States

Murray Rothbard was born in 1926 and died in 1995. Milton Friedman was born in 1912 and died in 2006. Their careers almost entirely overlapped, yet one left a lasting influence on the free world, while the other died in more or less absurdity. Rothbard only influenced his own cult-like following, yet many of his anarcho-capitalists rather “throw out” Friedman’s libertarian legacy.

When it comes to twentieth century figures within the libertarian movement, there may no greater figure when it comes to influencing economics, the public, American public policy and the lives of millions.

Milton the Economist

Milton Friedman’s contributions to the science of economics cannot be understated. He was the figurehead of the Chicago School, a free market oriented school of economic thought based out of the University of Chicago. Alongside him were his prominent colleagues, Frank Knight, Ronald Coase, and Robert Lucas, to name a few.

The entire field owes a huge debt to Friedman and his crew. He overturned many of the prevailing errors brought about by the Keynesian Revolution: most notably with his critique of the Phillips Curve. Even Paul Krugman admits that Friedman did the science a great service with his contributions and critique of former Keynesian orthodoxy:

“Friedman’s critique of Keynes became so influential largely because he correctly identified Keynesianism’s weak points… I regard him as a great economist and a great man.”

-Paul Krugman

Regardless of how you feel about his political inclinations, he believed in them because of his economic thought. And his thought is arguably one of the most profound things to be produced in the 20th century. It is completely unfair to dismiss, much less “throw out,” someone because of minor disagreements on theory. Friedman is one of the greatest intellectuals of his time and libertarians should wholeheartedly embrace him as one of their own.

Milton the Public Intellectual

As was written in his obituary for FEE, “Friedman did more than any single person in our time to teach the public the merits of deregulation, privatization, low taxes, and free trade. His work inspired the economic agendas of President Ronald Reagan and British Prime Minister Margaret Thatcher, as well as the liberalization of economies in eastern Europe and the former Soviet Union.”

Take Capitalism and Freedom, for example. Read by over half a million in eighteen different languages, it introduced ideas like school vouchers and pushed for lower and flatter taxes.

Similarly, Free to Choose was the best selling nonfiction book in 1980 and was watched by millions. Only F.A. Hayek could boast a similar public reach for a libertarian.

Additionally, Friedman wrote over 300 op-eds for Newsweek, 121 op-eds for the Wall Street Journal and another twenty-two for the New York Times. But maybe he would have been been better off preaching to the libertarian choir instead of engaging with the public at large?

Milton Ends the Draft

In 1940, the United States began its third and final draft. On March 27, 1969 President Richard Nixon formed the Gates Commission to look at the possibility of an All-Volunteer Armed Forces– Friedman was one of its most prominent members. The commision of fifteen members had five members in favor of an all-volunteer armed forces while the other ten were split evenly between being against the idea and neutral towards it. In less than a year, the Commission came to a unanimous 14-0 recommendation (one member was unable to vote on the specifics, although he did support an all-volunteer military) to end the draft.

Three years later, the draft was gone.

Milton Influences Estonia

On August 20, 1991, Estonians left the darkness of the Iron Curtain and joined the free world as the Republic of Estonia replaced the Estonian Soviet Socialist Republic. Mart Laar was the first Prime Minister of Estonia after the interim government. He led from 1992 to 1994 and again from 1999 to 2002. As noted in Foreign Policy,

“In barely two years, from 1992 to 1994, the radical reforming Estonian government of Mart Laar introduced a flat tax, privatized most national industry in transparent public tenders, abolished tariffs and subsidies, stabilized the economy, balanced the budget, and perhaps most crucially, restored the prewar kroon and pegged it to the rock-solid deutsche mark. As a result, Estonia became one of the most open and transparent economies in Europe, and with growth came political stability: Russian troops left the Baltic region by 1994, fears of Balkan-style ethnic conflicts receded, and Soviet noncitizens in Estonia and Latvia began to assimilate.”

Before Laar became Prime Minister he read one book: Free to Choose by Milton Friedman. A few years later, he was in D.C., talking with US Representative Dick Armey. Armey asked how the Estonian government was able to be so successful with their free market reforms. Laar’s answer was simple, “We read Milton Friedman and F. A. Hayek”.

Milton Friedman: Common Complaints

No, Milton Friedman was not an Austrian, but Austrian Economics is not synonymous with libertarianism. Libertarians can be non-Austrian and Austrians can be non-libertarian.

No, Milton Friedman did not believe in Praxeology, but Praxeology is also not a necessity for libertarianism, nor is its veracity without question. Even F.A. Hayek, Ludwig Von Mises’s greatest student, broke from Praxeological orthodoxy.

No, Milton Friedman is not an anarcho-capitalist. He believes in a state, but anarcho-capitalism is only one part of the broader libertarian ideology. As Hayek said, “Our general views on what is desired and what is not are almost identical until we get on to money.”

The greatness of a libertarian should not be defined by their purity, but by how much they advance liberty. Libertarians like Murray Rothbard win the purity test but do little to advance libertarianism. As Paul Krugman wrote in 1994, Friedman waged a campaign “Goliath of Big Government” that “eventually bore fruit in radical changes in both economic ideology and real-world economic policy.”

Whether it be his direct or indirect influence on Republican administration, pushing free market policies in other countries, advocating for drug legalization, getting the state out of education, loosening licensing laws, giving less power to central banks or cutting taxes and spending, Milton Friedman’s legacy is one of promoting freedom and liberty. Thus, libertarians should be proud to share an intellectual home with him.

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Throw Out Milton Friedman

By Mason Mohon | @mohonofficial

I think it’s pretty clear that Friedman is a statist. -Murray Rothbard

Milton Friedman is popular, and not just “libertarian popular” (although he is) but mainstream popular. His book Capitalism and Freedom has over half a million sales and Free to Choose has also had its fair share of economic and political influence. I have spoken to many fellow lovers of the free market and many have stated he was their primary influence in pushing people towards libertarian ideology.

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Why Does Socialism Starve People?

By Mason Mohon | USA

It comes up in every single debate. We see it every time we are arguing with a communist or another sort of lefty. The right-wing proponent will throw out instances like Venezuela, the Soviet Union, and other catastrophic failures of socialist economies. This is followed by the response from the left-winger that either those were not real communism/socialism, or that there are factors that the right-winger fails to realize. In reality, both of these arguments are really bad. We cannot throw out death counts and assume they are causally related to the institution of socialism. What must be explored is economic law, and we need to look at what sort of incentives a socialist economy creates, and whether or not it is compatible with human actors.

In this article, socialism and communism will be used interchangeably because they both fit the definition of a planned economy.

We must first look into how we are supposed to study economics. The beginning of all economic thought comes from logical deductions coming from the action axiom. That is, we begin all economics with the axiom that man (human) acts. It is why Mises termed his magnificent economic treatise Human Action, and it is the starting point the Austrian School of economics comes from. This article is not to explore all of the warrants behind this line of thought, though. For an in-depth explanation of praxeological reasoning, I recommend the “Chapter Zero” of Chase Rachels’s book A Spontaneous Order, which is written by Will Porter and titled Epistemology and Praxeology. Within it, it is explained why we begin here and has refutations of the opposition.

What is important, though, is that we deduce economic law logically, not through reflecting upon history. This is not to say that history is not important, for it can prove itself to be an important tool in many instances, but all too often will people interpret history one way, which goes directly against logical deductions, one example being the second industrial revolution. Economic law cannot be deduced from history, it can only be reflected on and compared.

What this means to the present situation is that it goes directly against what it means to be a student of economics to say that “the Soviet Union had starving people, and because of that socialism/communism must lead to starvation.” We cannot use a historical example as an economic law. Rather, we must look to what economic law says and the reasoning behind why it says what it says. Once we have done this, then we may say that socialism is causally related to starvation and mass death. It is simply not enough to make claims about historical repetition.

Now, we may look at the economic issues with socialism. The argument will take its form in three planks: how socialism will cause misallocation, how socialism will incentivize people to produce, and how socialism will incentivize people to climb society.

In the first place, we must look at why socialism causes misallocations. These misallocations are the causes of the shortages of food and resources we associate with socialism. It is often objected that instances where this misallocation did occur, it was “not real socialism” or “not the right brand of socialism.” The problem is that misallocations will occur in any instance where the factors of production are no longer privately owned, which is the defining characteristic of socialism. In any economy, to determine whether or not an entrepreneur or producer is engaging in fruitful, efficient, and socially productive action, they must engage in economic calculation. This is the action of seeing whether or not their initial investment has created a profit or a loss. If an entrepreneur or producer discovers they have suffered a loss (people are not buying what they are providing), they discover that it is not good for resources to go where they are putting them. In a socialist economy, no economic calculation can exist, because market prices are nonexistent. Because of this, there is no way to discover whether or not resources are going to the right places. With something like food, it is extremely important that we figure out if it is going to the right places. To read more into how entrepreneurs serve society, I recommend this article.

Now that we have established the economic law proving socialism to misallocate resources, we can look at history and the world around us to see this being reflected. Socialist commonwealths across the globe have fallen apart. It is why there was no food in the Soviet Union, and it is why Venezuela failed to properly utilize its oil, resulting in profound economic decline. Some economies may seem to be socialist and successful, but those are instances in which we are either misunderstanding what their economy is, or they are purely surviving off of luck, meaning enough resources to keep the country from collapsing have been delegated, but there is no way to know what kinds of losses this is and will be producing without economic calculation.

Furthermore, we must look at the incentives to produce that are produced by a socialist economy. In Hans-Hermann Hoppe’s critique of socialism in his book Democracy: The God That Failed, he explains the ways wealth can be created within an economy. There are three, the first of which being mixing your work with untouched land. The second is to produce the good by combining or changing resources, and the third is by transferring a good through voluntary and contractual means. If the ownership of all assets is assigned to the collective (or the state), then individuals who mix their work (or homestead) with land, individuals who produce, and individuals who exchange lose their incentive to create wealth, because anything they create they will not own, for the collective (or the state) shall assume ownership. The cost of performing fruitful tasks is raised, and those that do not act productively still benefitted, increasing the incentive to not work (to each according to his need).

Moreover, we must look at the paths available to people to get to the top of society. In a capitalist free-market society, the best way to climb to the top is by starting a business and serving consumer needs. As Dr. Hoppe said, if one “wants to increase his wealth and/or rise in social status, he can only do so by better serving the most urgent wants of voluntary consumers through the use he makes of his property.” Clearly, the way to raise your own social status in a private property order is to serve others, making selfishness ultimately selfless. A socialist order stands in stark contrast, for to rise one must appeal to the collective or whoever elects people into the state. Doing this promotes cutthroat dirty politics, and it forces one to rise through “promises, bribes, and threats.” This has clearly been reflected throughout the world of big government and socialism, for Soviet Union leadership was given to whoever could stab the most people in the back in the end.

In conclusion, it is important that we know the causes of socialist terror. It is not logical or economically sound to make quick assumptions about starvation in the past and claim socialism and communism are failures. Rather, we must make praxeological economic deductions from the basis that man acts to determine whether or not socialism will work. The results are in strong opposition to socialism, which causes misallocations, laziness, and dirty politics. In the end, the results are catastrophic, and history only stands to prove.