Let Aggressors Have All The Guns

It is only a matter of time until politicians of all stripes start using the recent attacks in Norway as a pretext for clamoring for an even more thoroughgoing coercive disarmament of the societies of the world. Let us leave aside the standard question that suggests itself in this context, namely, whether we should be more afraid of the so-called "private criminals" or of the institutional monopolies of violence, entities responsible for some 200 million civilian deaths in the 20th century alone. Let us ask a simpler question: how many of the victims of the Norwegian killer would still be alive if any of them (let alone many of them) were equipped with a gun?

The Machiavellian Dictionary

The following list illustrates the curious phenomenon of a single concept assuming different verbal forms depending on the context to which it is applied - in this case that of the private sphere on the one hand and the state sphere on the other hand.


Private realm | State realm
---------------------------------
Anarchy | International relations
Animal spirits | Rational policy-making
Assault | Intervention
Blackmail | Deterrence
Coercive monopoly | Exclusive authority
Collusion | Bipartisanship
Consumerism | Fiscal activism
Counterfeiting of money | Liquidity provision
Cronyism | Public–private partnership
Debasement of money | Quantitative easing
Dissipation of assets | National debt default
Envious resentment | Passion for social justice
Expropriation | Eminent domain
Favouritism | Affirmative action
Fencing | Redistribution
Financial fraud | Creative accounting
Financial prudence | Choking aggregate demand
Frugality | Austerity
Gang war | Politics
Herding | Collective action
Hidden unemployment | Public works
Indoctrination | Public education
Intimidation | Reprimand
Kidnapping | Conscription
Murder | Death penalty
Mob law | Positive legislation
Mob rule | Democracy
Molestation | Security control
Monopolization | Coalition building
Money laundering | Foreign aid
Obstruction | Regulation
Parasite | Benefit recipient
Pillage brokering | Political campaigning
Ponzi scheme | Social security
Profit-seeking | Public service
Profligacy | Stimulus spending
Protection racket | National defense
Robber baron | Party donor
Ruthlessness | Resoluteness
Scam artist | Politician
Selfish desire | Public necessity
Self-partiality | Judicial independence
Self-serving rationalization | Public interest
Slavery | Political obligation
Special privilege | Protection
Stockholm syndrome | Civil allegiance
Terrorist organization | Intelligence agency
Theft | Taxation
Transgression | Emergency measure
Venality | Pragmatism

An Analogy for Consideration

If the prevalence of trashy literature and music is to be an indicator of the fact that there is an inverse relationship between the popularity of a given cultural product and its objective aesthetic value, then what should the popularity of Keynesianism in economics, postmodernism in philosophy, and "political correctness" in academia in general tell us regarding the objective intellectual value of these "scholarly products"?

Three Popular Expressions I Would Recommend Not Using

Price mechanism - This phrase suggests that the uniform, monetary scale of exchange values expressible in cardinal terms, to which all goods and services can be reduced and which allows for determining the extent to which any given entrepreneur acts in line with consumer sovereignty, is not the outcome of the totality of voluntary choices made by the totality of people wishing to satisfy their wants in a cooperative, contractual manner, but the result of some automatic, deterministically or probabilistically predictable movements and reactions, which can be mechanically constructed or corrected and "scientifically" improved. "Price system" seems to me to be the preferred replacement here.

The game of supply and demand - The word "game" is much abused in the context of discussing market interactions, while being completely inapplicable to it. The everlasting entrepreneurial effort to satisfy consumer wants is no game. "One cannot play speculation and investment. The speculators and investors expose their own wealth, their own destiny. This fact makes them responsible to the consumers, the ultimate bosses of the capitalist economy. If one relieves them of this responsibility, one deprives them of their very character." (Human Action, p. 705)

Spontaneous order - This is probably the most controversial position on this short list. However, I believe that the way in which Hayek imported the term in question from the biological context and used it in his writings generated a fair share of unnecessary confusion. To be more specific, it is suggestive of the notion that the social division of labor, the progressive accumulation of capital, the price system, the legal system protecting property rights, etc., are results of blind, undirected, undesigned evolutionary processes, from which the defining elements of human action are wholly expurgated (I do not claim that this is consistent with Hayek's own thinking on the topic, but this seems to me to be the usual interpretation of it). And yet, while these phenomena are certainly undesigned on the macro level, it cannot be overstressed that on the micro level they are outcomes of the dynamic interaction of innumerably many individual plans and designs of the totality of market participants. Thus, I would recommend dropping the phrase "spontaneous order" in favor of Menger's "organic order" ("organic" as in "of or characterized by the coordination of integral parts").

Coase as a Proto-Dehomogenizer?

"Quite apart from the malallocations which are the result of political pressures, an administrative agency which attempts to perform the function normally carried out by the pricing mechanism operates under two handicaps. First of all, it lacks the precise monetary measure of benefit and cost provided by the market. Second, it cannot, by the nature of things, be in possession of all the relevant information possessed by the managers of every business which uses or might use radio frequencies, to say nothing of the preferences of consumers for the various goods and services in the production of which radio frequencies could be used." - R. H. Coase, The Federal Communications Commission, 2 J LAW & ECON 1 (1959), p. 18.

The title of this post is of course tongue-in-cheek, but it is still interesting to come across what seems to be a prominent Chicagoan's appreciation of the fact that Mises's and Hayek's arguments against central planning are complementary, but different (not to mention the fact that they are both clearly distinguished from the public-choice-style agency problems).

The Full Catastrophe (Empirical Q.E.D.)

This piece of news concerning the latest Greek protests against austerity measures provides a perfect illustration of my previous post. Heavily redistributionist statism, additionally fuelled by the creation of the "monetary commons" of the Eurozone, unsurprisingly degenerated into a war of all against all for government handouts. However, since every action has its opportunity cost, engaging one's time in the use of political means necessitates not engaging one's time in the use of economic means - in other words, the pursuit of redistributionist parasitism necessarily comes at the cost of abandoning economic production.

This, in turn, leads to the emergence of an inevitably unsustainable system of social relations, where instead of producing scarce goods for others, everybody tries to free ride on someone else's productive activities. Furthermore, since among the participants of such systems there are none who are without blame with respect to sustaining and nurturing them, when the unavoidable conflict finally takes a violent turn, the violence is expectedly directed at the nexus of the ongoing mutual parasitism, at Bastiat's "great fiction" - the state.

Like Rothbard, I am inclined to think that in such scenarios bankruptcy might actually be the most healthy outcome, capable of ultimately exposing the sustainability of redistributive statism for what it is - a dangerous fiction. The alternative - prolonged and even more intense draining of the monetary commons of the Euroland - can only further reinforce, solidify and possibly institutionalize the financial moral hazard, not only among the current near bankrupts, but also, and perhaps even more importantly, among those heading the same way, and those who, given proper incentives, might happily join in.

PS. The link at the beginning of this post (which is very typical in this regard) mentions the most violent among the protesters against governmental retrenchment as "anarchists". Could one think of a better proof of living in an Orwellian world?

Hobbesianism Turned on Its Head

The Hobbesian story can be summarized in the following equation: no territorial monopoly of force = nasty and brutish war of all against all in the territory in question. The problems with this assertion are too numerous and well-known to bear repetition here. However, I believe that a somewhat underappreciated point is that Hobbesianism is not only problematic in the sense that the above implication is generally dubious, but also, and perhaps most notably, in the sense that it is not its left-hand side, but its negation, that can be plausibly claimed to imply its right-hand side.

It is a relatively uncontroversial contention that monopolies of force can survive only for as long as their subjects ("citizens") obey them. And continued obedience cannot be treated as a given - any large-scale collective action problem is, admittedly, very difficult, but not impossible to overcome. Hence, it is practically necessary for the institutions in question to corrupt their subjects with promises of handouts, thus turning them into (at least semi-voluntary) clients. But since monopolies of force generate their revenues exclusively through coercive expropriation, they can satisfy their specific clients exclusively by expropriating their other clients (or those of their subjects who resist being clientelized), the result being that every member of "governmental" clienteles tries to live at the expense of every other such member. Admittedly, the scope of this "soft" war of all against all varies with the type of political regime (in a feudal system it may be largely restricted to the landowning classes, whereas in modern day social democracies it is virtually all-encompassing), but the conflict in question is nonetheless the defining feature of every form of statism.

Thus, it turns out that not only is the Hobbesian story highly implausible, but also that implementing the Hobbesian recipe for peace generates the very problem that it was supposed to counter. In other words, Bastiat ("the state is the great fictitious entity by which everyone seeks to live at the expense of everyone else") turns Hobbes on his head.