Thursday, December 29, 2011

A Historical Pattern of "Counterfeit Rebellions"

"The youth movement was an expression of the uneasiness that young people felt in face of the gloomy prospects that the general trend toward regimentation offered them. But it was a counterfeit rebellion doomed to failure because it did not dare to fight seriously against the growing menace of government all-round control and totalitarianism. The tumultuous would-be rioters were impotent because they were under the spell of the totalitarian superstitions. They indulged in seditious babble and chanted inflammatory songs, but they wanted first of all government jobs. (...) [The movement] was doomed because it did not attack the seed of the evil, the trend toward socialization. It was in fact nothing but a confused expression of uneasiness, without any clear ideas and definite plans. The revolting adolescents were so completely under the spell of socialist ideas that they simply did not know what they wanted".

- Ludwig von Mises ("Bureaucracy", pp. 96-7), writing in 1944, on the so-called "youth movement" in pre-World War I Germany and Italy. See any parallels with the "Occupy movement"? If you do, remember that "those who cannot learn from history are doomed to repeat it".

Monday, December 26, 2011

Another Mises-Hayek Dehomogenization Quote

In the following quote from "Bureaucracy" Mises makes a rather conspicuous distinction between the fundamental allocative importance of profit-seeking (which is possible only in the system of private ownership of the means of production, capable of generating a meaningful price structure) and the additional allocative importance of not interfering with the activities of local branch managers, who are best suited to utilize the knowledge of particular circumstances of time and place.

From this it clearly follows that the added value of decentralization can be gained only in the environment that allows for economic calculation, and that it is by no means logically (or even empirically) impossible for the latter to operate sufficiently effectively in the absence of the former, though there certainly exists a one-way "efficiency correlation" between the two.

"It would be impracticable to restrict the discretion of (...) a responsible submanager by too much interference with detail. If he is efficient, such meddling would at best be superfluous, if not harmful by tying his hands. If he is inefficient, it would not render his activities more successful. It would only provide him with a lame excuse that the failure was caused by his superior's inappropriate instructions. The only instruction required is self-understood and does not need to be especially mentioned: seek profit. Moreover, most of the details can and must be left to the head of every department."
- Ludwig von Mises, "Bureaucracy", p. 34

Friday, December 23, 2011

An Exercise in Orwellian Psychology

If one subscribes to the statement of the leftist sociologist Marcuse that a free enterprise society produces "euphoria in unhappiness", how would one describe the supposedly genuine mass mournings over the deaths of communist dictators? "Depression in happiness"?

Monday, December 19, 2011

The Ultimate Argument for Liberty

With the passing of another nuclear-equipped murderous dictator, I again reflected on the fact that all the achievements of human civilization – past and present; intellectual, moral and aesthetic – could be wiped out in the blink of an eye only and solely because of the existence of vast, institutional apparatuses of violence, aggression and coercion. If there is an ultimate argument for liberty, then this is it for me.

Monday, December 12, 2011

Jokes About the Fed, Central Banking, etc.

Since irony is the ultimate intellectual weapon, the Austro-libertarian bunch could certainly make use of more jokes about their favourite institution and the phenomena it gives rise to. Below are those very few I was able to find:

A waiter in a restaurant brings over a wine glass and fills it halfway up.
The optimist thinks the glass is half-full.
The pessimist thinks the glass is half-empty.
The Austrian economist thinks the restaurant industry has malinvested its capital into oversized glassware, probably because of the Fed.

I was at a pizza joint last night, and I noticed the man in line in front of me was none other than Ben Bernanke. Wow! Imagine that! The person behind the counter asked Ben if he wanted his pizza cut into 6 slices or 10. Ben said, “You better make it 10! I’m really hungry tonight!”

One beggar says to another:
“The Fed is propping up the economy with an infusion of cash.”
The other one replies:
“Looks like we’re gonna need bigger cups.”

Q: How many central bank economists does it take to screw in a light bulb?
A: Just one - he holds the light bulb and the whole earth revolves around him.

Ludwig von Mises found consumer indifference “impossible to observe in practice.” It just bugged them too much that he was watching.

A Keynesian and an Austrian were stranded in a rising flood. They climbed upon the roof of the building and were getting very nervous as the swift waters kept on getting higher and higher.
As they were nearing the end, they looked in the distance and saw a local farmer passing in a small boat. The Austrian called out to the man, “Come help us and take us to safety!” The farmer replied, “My boat is full of personal valuables from my house – I have no room in the boat!” The Austrian said, “We are mere moments from death! I will pay you $1000 if you dump some of your belongings and pick us up!”
The farmer quickly motored over, threw some of his belongings into the rushing waters, and helped the Austrian get in. As he achieved his safety he turned back to the Keynesian and said, “Come brother, join me in the boat. $1000 is a small price to pay!” The Keynesian replied, “No thanks, I have faith that the government helicopter will be here in no time.” (by Jeffrey J. Hardy)

Tuesday, December 6, 2011

Austrians vs. Keynesians, Forecast Comparison

Keynesians 1989: "The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive."
- Paul Samuelson, Nobel Prize-winning Keynesian

Austrians 1920: "One may anticipate the nature of the future socialist society. There will be hundreds and thousands of factories in operation. Very few of these will be producing wares ready for use; in the majority of cases what will be manufactured will be unfinished goods and production goods. (...) In the ceaseless toil and moil of this process, however, the administration will be without any means of testing their bearings. (...) In place of the economy of the “anarchic” method of production, recourse will be had to the senseless output of an absurd apparatus. The wheels will turn, but will run to no effect."
- Ludwig von Mises, "Economic Calculation in the Socialist Commonwealth"

Keynesians 02.08.2002: "To fight this recession the Fed needs (...) soaring household spending to offset moribund business investment. And to do that (...) Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
- Paul Krugman, another Nobel Prize-winning Keynesian

Austrians 06.04.2004: "Given the government's encouragement of lax lending practices, home prices could crash, bankruptcies would increase, and financial companies, including the government-sponsored mortgage companies, might require another taxpayer bailout."
- Mark Thornton, Mises Institute

Keynesians 10.02.2010: "Greece has formulated a very carefully balanced balance between social cohesion and economic reestructuring."
- Joseph Stiglitz, yet another Nobel Prize-winning Keynesian

Austrians 11.02.2010: "While the increase in taxes will cause new problems for the Greeks, other problems remain unaddressed: The huge public sector has not been substantially reduced. Wage rates remain uncompetitive as a result of strong labor unions. (...) The future of the euro is dark because there are such strong incentives for reckless fiscal behavior, not only for Greece but also for other countries."
- Philipp Bagus, author of "The Tragedy of the Euro"

Monday, December 5, 2011

Pogadanka o kryzysach gospodarczych

Moja pogadanka dotycząca podstaw austriackiej teorii pieniądza, kapitału i cyklu koniunkturalnego (przedstawiona 27 listopada na spotkaniu Londyńskiego Klubu Frondy). Kliknij tutaj by odsłuchać.

Saturday, December 3, 2011

Material and Spiritual (Non)explanations

Alvin Plantinga, the "analytical theist", writes: "Explanations come to an end; for theism they come to an end in God. Of course the same goes for any other view; on any view explanations come to an end. The materialist or physicalist, for example, doesn't have an explanation for the existence of elementary particles: they just are".

However, I would add to this that these two "explanatory dead ends" do not seem to me to be equally defensible as logical conclusions of the respective underlying trains of thought. This is because, on this view, elementary particles would seem to be something of an anomaly - the only unexplainable (or perhaps self-explanatory?) material objects in the whole universe. "The act of divine creation", on the other hand, would be no more unexplanaible (or self-explanatory) than myriad other mental events, including probably most of our aesthetic choices and many of our moral choices.

Why do you like the artwork of Leonardo da Vinci more than that of Raphael? It appears to me that "because I do, period" is a perfectly legitimate answer, and I do not see any way in which its intentional features could be meaningfully deduced from the physical composition of the answerer. "Basic beliefs" and "basic desires", as well as "basic choices" that follow from them, do not normally strike us as epistemologically problematic. The act of divine creation can, it seems to me, be plausibly treated as one of such basic choices. The stipulation of "basic material objects", on the other hand, sounds to me like a rather poor intellectual cop-out for a philosophical materialist, not at all compatible with the causal character of the world as described by the natural sciences.