Curt Doolittle

Author: Curt Doolittle

  • What Problems Should Austrians Solve. Different Ones Apparently.

    Walter block sent out a survey to the Mises blog in support of some research he has been doing. In it, he asks, what problems should Austrians solve? I read the list, and, thought that almost none of the categories of interest were actually problems that needed solving. The problems that economists need to solve are not those which derive from the antiquated process of pooling, or aggregating quantities into categories. We know that aggregation of categories a failure as a strategy. We know that we must apply statistical methods across periods of differing utility and differing sentiments in order to find correlations from which we can deduce theories of causation. It is a loose set of tools for a complex world. The problem is to define institutions that would allow us to posses knowledge of human activities so that we can measure distortions of policy. The problem is institutions and data. It is not how to further plumb the depths of error – to divine nonsense from the nonsensical. The problem is our institutions.

  • Conservatives Can’t Remake Society Either.

    Leftists wish to remake society. They want to return us to the “homogenous tribal redistributive society” (HTRS) on a large scale. They will fail. They have failed. They cannot make a homogenous redistributive and tribal society from a multicultural empire of vastly unequal groups of people who who act as competing groups of people. ( See Putnam’s article on the impact of diversity ) The only result of any government over this diverse set of people will be a totalitarian one. While in our fantasies, we believe that we could have immigrated only a certain class of people, or a certain race of people, or both, but the continent is too large, and the chance to profit by importing cheaper labor in each generation diluted the chance to become a large, powerful and single-class-single-race society. The import of the vast numbers of Europeans who then in turn used the new land and ready capital to produce cheaper goods to ship back to europe at a discount was not an insignificant cause of the collapse of european civilization and the resulting european civil war we call the world wars. Status is epistemologically necessary social construct — we couldn’t live without it — and Status also controls access to mates, networks, and opportunity. Since a large and diverse population would doom most people in the population to a status discount in exchange for economic solidarity, they fracture into factions where status within the factional group gives them access to mates within their group, opportunities within their group, and influence in their group. In other words, this factionalization creates an increase in the opportunities for any individual to obtain status. (Islam and Buddhism solve this problem by making status spiritual rather than material. This is the ;primary attractiveness to these religions. They create mental rather than material status. Jews work the inverse methodology: the achieve status by group persistence. Whites are torn, and that is their problem. ) Each little faction in the world seems to desire that they make their whole society homogenous, equal and tribal. OUr tribal instincts, and instincts they are, compete with our status instincts to form an equilibrium between the comfort necessary to maintain a group, and the innovation needed to strengthen the group. We call these the masculine and feminine, but that is to apply gender bias to a problem where gender is meaningless. The only societies who achieve the comfort of tribal equality do so by embracing that feminine tribal homogenous egalitarian principle at large, and oppressing attempts at disruptive status attainment, is the poor, ignorant, and despotic monotheistic societies. And in doing so they embrace the virtueless cycle of degenerative decline. So no, liberals cannot remake society. And if they succeeded we would simply decline in prosperity. They would not make the utopia that they dreamed of. Or rather they might make the feeling of coming utopia, but actually cause decline. Whereas conservatism forces us to face material reality and in doing so we create a utopia we had not planned to. But conservatives cannot remake society either. We never could. Conservatives live by the fantasy that they can create a society where they can legitimately rule, without violence, by merit alone, and that merit the act of denying the accumulation of power, by the force of rules of consent, rather than the promise of violence if those rules are broken. In other words, conservatives who are not willing to use violence to maintain the rules are attempting to get others to pay the costs of maintaining those rules. In more economic terms, conservatives are as unwilling to pay the costs of preventing the accumulation of political power, as liberals are unwilling to pay the costs of enforcing the extraordinary discipline needed to control breeding rates, to work and save, and to build a meritocratic society. So, in this light, conservatives are either foolishly believing the documents of their religion of the American Founding Documents If someone breaks the rules you must resort to violence. The purpose of the rules is to avert violence. The threat of breaking the rules is that we will return to our use of violence. On a regular basis we allow liberals break the rules. Conservatives do not use violence against the state because it would be violence against their church. Yet liberals use violence and protest and insurgency and capital disruption and undermine the constitution, undermine the courts, by-pass the legislature. And conservatives sit by, wondering why their god does not enforce the scripture of the founding documents. Conservatives believe that we can aspire to make everyone noble – a member of the fraternal order of soldiers of equal suffrage. They believe that we can live according to the founding principles of the american republic, rather than those documents only survived seventy years, until the civil war. Afterward it became a useful myth by which the attainment of power could be justified by popular consent. The American founding civilization died with the civil war. Since 1914 we have taken over the role of the british empire. Our ‘god’ died with that war. For a brief period in human history, we created the illusion that a majority of people could join the civic republican tradition. Any man who could fight and could own a bit of land, could call himself noble. Because of our vast division of knowledge and labor, which has freed us from physical labor, and which rewards merit, status, and prosperity to the result of genetic gifts, our citizenry is no longer equal enough to form a large class of lesser nobility and soldiery, that is the social construct necessary for political unity, and cultural and territorial expansion, and the maintenance of an empire. There is no equality of man. There never was. There never shall be. We are unequal. We are unequal in physical ability and intellectual ability. (( Human capital is an asset that is worth investing in: when educated in large numbers, african americans only improved in IQ slightly, they did improve. )) We cannot have a government of equals unless that society is extraordinarily small and homogenous. The republican form of government was always a minority form of government. It was simply a meritocratic minority form of government, that desired a constant expansion of and rotation of the elites in order to keep the homogenous society competitive and the elites prosperous. To attempt to make a homogenous tribal redistributive society out of an empire of heterogeneous is simply an impossible act. THe question then, is do we fragment the empire so that each fragment may have a homogenous tribal redistributive society, or do we rule the empire in self-defense, to protect ourselves from it? Any group that wishes to maintain power must in the end do so by its willingness to use violence. Any group of meritocratic individuals must maintain power or become the subject of extortion by less meritocratic groups : usually the priestly class or their modern version the public intellectual class. THis is another instance of the ancient battle between those who coerce by words and those who coerce by force, and those who coerce by trade. Conservatives are, by and large, the remnants of lesser nobility. They practice military epistemology. (( Military epistemology is the most accurate epistemology because the outcome of taking risks is very high. Nassim Taleb discusses this topic in The Black Swan. )) The questions we must answer are : 1) Whether we will use violence to maintain the meritocratic society, or become enslaved by the Bonapartist (( Bonapartism: democratically elected totalitarians )) ambitions of the politically active minority. (Contemporary Russia is a Bonapartist state.) 2) Whether we will break the nation into regions which may choose different approaches to government and allow people to vote with their feet, or whether we will stay an empire and attempt to force people into the Civic Republican Model. (( Immigrant urban areas will choose Bonapartism, the south, and middle of the country will choose meritocracy, and the west coast democratic egalitarianism – at least as long as the center of world trade remains the pacific rim. ))

  • IEA Blog: UK Lib Dem’s and ‘Ten Years Of Substantial Unemployment’

    I love reading the UK press, because by and large, the quality of discourse is far beyond that of what occurs in the US. I posted on the IEA Blog, this response to the statement that, coarsely written and paraphrased here as ” Yes the Lib Dem’s may achieve power, but anything is better than ten years of substantial unemployment.” I’m a little cautious about sounding like a critic when I actually think that the IEA produces great thought. But it is far less work to criticize a good idea, than it is to refute an ocean of fantasy and ignorance. Hence I apologize if I come off a critic rather than an advocate.

    Unemployment results from the government’s confusion between consumption and production in that they assume that consumption is equal to production. Their policy of general liquidity that diverted capital from production to consumption and created both recursive asset inflation, and a reduction in competitiveness. This is the broken joint in Keynesian logic. It assumes that increasing liquidity can be put to increases in production. Production means that an activity increases output while decreasing man hours, and costs. The problem for any state is to put captial, not behind consumption, but behind increases in production that cannot be achieved by the private sector. … This concentration of capital will create new jobs, and ongoing competitiveness, from which redistributive capital can be siphoned. Private sector production increases will lead to some unemployment. Uncontrolled breeding and immigration will lead to unemployment, and particularly disadvantage second quintile workers. (A step above the bottom). So the state can divert this process by participating in funding international (export) competitiveness. The state must adopt a policy of investment, not liquidity or redistribution. Because only investment allows redistribution. (And the government, which consumes such a vast amount of GDP is simply a redistributive system.) A free market is a bounded market, because there are LIMITS to private investment. Since all borrowing is, under fiat money, borrowing from the middle and lower classes, and they (as we have just demonstrated) carry the risk of borrowing, then the reward for that investment should be returned to them. As such the state should borrow to create productivity increases (power, transportation, technical innovation, resource exploitation, and education) and return a portion of the profits to the citizenry as redistribution. Laissez faire both puts the citizenry at risk without reward, concntrates capital in the hands of a state sponsored class, and deprives the citizenry of opportunities. That is how to prevent ‘ten years of very substantial unemployment’. The party that accomplishes it is meaningless. THe party that ignores it is meaningless.

  • Conservatism Is Not A Longing For The Past – It’s A Capitalization Strategy.

    Being a conservative simply means taking a gradual approach to social change and particularly with respect to the financial, family and military traditions that affect status and political power, which they are skeptical of. Conservatism means being skeptical that our visions of the future will come true, and looking at the world as what people ACTUALLY DO not what we WISH they would do. In that sense, conservatism is historically scientific even if linguistically archaic. Conversely, while liberalism is linguistically modern, it is utopian, idealistic, contra-observation, contra-history, and therefore anything but scientific. The differences between these two philosophies are vast and numerous, but the one that is most important, is the difference between the reliance abstractions from experience in conservatism, and the reliance on abstracting experiences in liberalism. This may seem a complex idea, but liberals try to extrapolate the daily experience into the extended order of human cooperation. THis is called ‘induction’. Conservatives synthesize the actual experience of aggregate human activity from history. This is called ‘deduction’. Induction is a process that we are not sure, despite the vast effort of philosophers, exists. In other words liberalism if faulty on scientific grounds. It is a religion. This language problem has always been an issue for conservatives. Liberal dictums may sound scientifically sound if one induces from experience. Conservative (dictums) are sensible when one deduces from abstractions of history. And everyone must use these shortcuts, because too few of us possess the knowledge to make rational judgements and therefore must rely upon basic principles when making decisions. In fact, rational thought is applied to the vast minority of choices. Most decisions are made by habit. The rest according to shortcuts. For the vast majority of people from either conservative or liberal, neither induction or deduction is a rational process of choice, but instead, a process of identifying analogistic sentiments: it’s the act of pattern recognition rather than reason. Pareto called this process of pattern recognition “residues and derivations”, others called them “Metaphysical Judgements” or “Sentiments”. Contemporary thinkers and public intellectuals call them “beliefs” or “biases”, or “science or religion”. And our language incorporates these different sentiments. Our arguments do as well. Our narratives, myths, popular fiction, entertainment, status aspirations do. But so do your political rhetoric, which, because reason would be a technique unavailable to the masses, rely entirely on a complex web of constantly warring sentiments wherein the citizenry seeks confirmation bias, rather than a simple argument consisting of reason, where the citizenry seeks both consensus and falsification of their biases. In other words, where people are skeptical – conservative and rational. Utopianism is a technology that people use during periods of prosperity. Because we have been artificially prosperous due to the discovery and exploitation of a continent, we as a nation are notorious for predicting an optimistic future that cannot or has not occurred. The public dialog over the causes of our prosperity is often inaccurate and self-congratualtory rather than factual. We have transformed our culture of evangelical christianity into one of evangelical democratic secular humanism. Conservatives are skeptics. They may speak in antiquated language, because antiquity is their source of their language. They may fail to articulate their position effectively in contemporary terms because of that language, but regardless of the source of their language, the content of their language is strategic, intelligible and rational. And it is not just a language, but a methodology that represents their strategy for social order. They ACT conservatively, think conservatively, and treat the world conservatively. This conservative strategy and conservative activities are why conservatives are, in general, more prosperous – and frankly, happy. And the sacrifices that they make in order to be prosperous are material to them. They remember them. And therefore they resent those sacrifices being ’spent’ by others who do not make the same sacrifices. Monetarists and capitalists are not conservatives. They may hide under conservatism. But they are not conservatives. The conservative class is a military, middle and craftsman class and it always has been and always will be. It is the ‘residue’ of the european fraternal order of soldiers at the bottom, and at the top, it’s a ‘residue’ of the middle class movement that revised and adopted civic republicanism during the enlightenment as a way of transferring power from the kings and church to the middle class. it is an alliance of the military and middle class. Liberalism (socialism, communism) is a ‘residue’ of a union of the priestly cast and the peasantry. Academia is simply an outgrowth of the church. The peasantry has always allied with the church, and the church has always had power because of it’s support by the peasantry. And that said, we do not have a separation of church and state. Our state religion is now democratic secular humanism. We are now a state-run-religion using the myth of division of church and state to oppress (or reform) religions so that we can have a state sponsored church. That’s it. That’s the articulated conservative position. The republican party collects conservative coalitions. The republican party is not a conservative party. conservatives join the republicans because they have no choice. They see the party as corrupt. People are complex and only join parties because of limited choice mandated by our ‘winner takes all’ form of government, which fosters class warfare. In fact, all political decisions exist on a spectrum or bell curve. There are a myriad of political decisions to be made. There are a myriad of people with different abilities to understand each political opinion. Each person is interested in a myriad of decisions. Parties are collections of people with opinions. Very skilled people tend to be highly unsatisfied with party choices. Very unskilled people tend to simply support their party of nearest interest. Parties therefore pick platforms that make enough people happy that they can get into power. Arguing that conservatives want to keep things asa they are, is a silly argument. The objection is simply illogical. The question instead, is whether liberals propose a solution that conservatives can live with, and wether conservatives can propose a solution that liberals can live with. The difference between social classes are differences in Time Preferences (between “consume” or “capitalize”, or gratification now versus gratification later). Longer (lower) time preferences are only possible if you have the ability to comprehend long term time preferences. This is another reason why social classes are organized by intelligence, and why a market economy tends to organize us into economic classes according to our application of intelligence to the satisfaction of OTHER PEOPLES WANTS, instead of our own. Time preference affects not only a dimension covering an individual’s perception of gratification. It’s a second dimension that describes whether his gratification now or later is served by providing solutions to himself or to others. This is the moral lesson of Adam Smith – that capitalism creates a virtuous cycle. If we had listened to the liberals in the last century we would have ended up like either Russia or China. If we had listened to conservatives we would not have had our progressive social changes, but we would not have corrupted our financial system using Kenesnian inflation. It’s the competition of ideas that gives us the choice as a body politic. It is the combination of LIBERAL OBJECTIVES and CONSERVATIVE METHODS that provides the means of achieving shared goals. Lets say that again. Liberal objectives are moral desires. Conservatives methods are moral means. It requires both these tools to achieve moral ends. The problem is, conservative methods take time because they require the learning and adaptation of people to calculative processes. These processes have nothing to do with religion. Christianity is largely a religion of the poor. Protestantism is perhaps the most important religion for generating wealth in the west as it is a class religion. Secular humanism is a feminine religion just as Aryanism (expansionist civic republican tradition of the initiatic fraternal order of city-defending soldiers) is a masculine religion. We do not need all to believe one thing, share one goal, work according to the same rules. If we did, we’d break the principle of the division of knowledge, labor, time, and intelligence. WHat people really want when they seek universal agreement is to concentrate labor, knowledge, time and intelligence on their goals at the expense of other people’s goals. Since people are unequal in their ability, in their class goals, in their cultural goals, in their age and experience, in their knowledge and in their intelligence, then we must divide up our actions into bits and pieces which we cooperate with each other to achieve. Democracy as we have implemented it is a winner-take-all political order. It foments class warfare. It does not foment class cooperation. We need a government that is a return to the division of labor and division of classes and time preferences. Democracy is a failure as we have implemented it. Because we confuse the value of the transformation of power inherent in democracy with the universal aspiration of classes, cultures, ages, generations, and abilities.

  • The Sentiment Of The British And Their Pseudo Intellectual Hypocrisy

    I read a number of the UK papers every day online. They are better than US papers for a variety of reasons. (( In the current ‘intelligence system’ it’s recommended that americans read Al Jazeera, Pravda, China News Daily, BBC News as well as the NYT. All are biased but the important issue is to know how biased our own papers are. )) US papers in general, formed to create homogeneity in the community. That community-centricity is why they’re going out of business in this post-community era. The web allows communities to have disparate voices (like normal people do) rather rather than having a self-centered referee edit, and dramatically bias their opinions toward the fantasy of democratic secular humanism. UK papers are more like the web: they represent factions. Our only ‘faction’ is the financial press. The rest, of the papers are almost universally are left-leaning along with our universities, that by and large, teach the religion of democratic secular humanism, as do our grade schools – a notion notion that has something to do with the fact that our children start to lose competitive ground in education about the time we start teaching them the religion of democratic secular humanism. If a religion has such a negative competitive impact can it be useful for any productive reason? Is not the measure of any philosophy the competitive standing of it’s practitioners? Of course, these ‘priests of democratic secular humanism’ attribute the a supposed american exeptionalism to their religion. But american exceptionalism is clearly false. Differences between US and european productivity are accounted for by differences in the number of working hours. While this productivity generates a lower cost of living in the united states, and while american government consumes less of the GDP than governments do in europe, and while americans live generally better lives, even if they live RISKIER lives, than do europeans, there is no exceptionalism to the culture that is caused by democratic secular humanism. American exceptionalism, which is almost entirely the product of selling off a continent, the military strength to do it, the system of private property rights that allows us to do it quickly and easily, and the use of those profits from selling off the continent being directed to the maintenance of the system of international money, defense and trade and the demand for our primary product: “dollars”, and the profits made by selling those dollars because of that militarily constructed system of money, trade, and soldiery. In other words, “property”, which is the prerequisite for trade, and the conversion of violent efforts at acquisition to peaceful efforts at production and trade, is created by vast military expenditure. The system is prolonged like any social system, by the promise of violence if it is broken. Unlike other systems, it is a system that increases production and makes the ‘pie bigger’ rather than decreases production by wealth transfer. Militarism for the purpose of ENFORCING PROPERTY RIGHTS is part of capitalism’s virtuous cycle of dividing labor, increasing granularity of property rights and types, increasing production and decreasing prices, instead of the use of violence to abuse the system of property rights. Militarism is, and can be, a good thing, depending upon how a culture defines it’s property rights. And the more granular the property rights and the better enforced, the more prosperity that people in a culture can generate by virtue of being ABLE to calculate USES of that property. People are not pacifist by nature. Humans are the most successful super predator that has ever occupied the planet. People are pacifist because they are weak. (( See Kagan in Power and Weakness, as well as Sorel in Reflections On Violence, as well as Keegan’s History Of Warfare )) They are predatory by nature when they are strong. Only by maintaining violence over this system do we make the system one where participation in the game of the virtuous cycle is the only possible solution to the improvement of one’s life and resources. And membership requires two payments: respecting property and control of, and responsibility for, your breeding. So, in today’s Times Online there is another article about the desire of the Taliban to start peace talks with americans. The reason for these talks is that Pakistan is no longer allowing the taliban safe haven, and that they are perfectly willing to wait until the Americans leave to reassert their power over their society. By giving the americans a reason for virtuous exit they buy themselves time to regroup, rebuild their numbers, rebuld the poppy and heroin trade, rebuild tehir finances, and retake social positions in the gangster state of afghanistan. America took over the British Empire, it’s trade routes, naval bases, currency position, after the first world war. Americas policy difficulties stem almost ENTIRELY from british and french colonial history – the foolish organization of territory by other than tribal boundaries, in the foolish presumption that humans do not act, and prefer to at, according to tribal preferences. If America STOPPED maintaining that system, does anyone live under the illusion that there would not be VAST and VIOLENT attempts at filling the vacuum of power? It would be the greatest commercial land grab in human history. It would be bloody. It would be violent. It would involve massive wars, starvation, trade interruption, an the only choice for those that choose not to participate would be to participate or be doomed to poverty and ignorance. As an island nation lacking the resources to support itself, with a culture of feminized men so comfortable in their weakness that they have lost the Civic Republican Tradition of the Fraternal Order Of Soldiers (where the British ‘mates’ cultural concept comes from) how would the UK fare in this new world? It would collapse into either switzerland or return to it’s historical position as a backwater. Just as there are plenty of silly americans in daily press, there are an almost unlimited of silly, ignorant, self deluding brits commenting as well. And these comments are important because they express popular sentiment. One of the comments left on this article is by a nobody named Peter Codner who aside from being a barrister and apparently confusing analytical psychology for something other than another post-christian cult of absurd metaphysics, states that “The semblance to Vietnam which was an humiliating defeat for the americans is uncanny. the yanks will run away.” While I understand that short time preference is a result of social class – meaning that we can educate people to use advanced tools and logic but not if we do not extend their time preference so that they can think beyond their experience, and learn that their experience and ability to comprehend that experience is profoundly limited – I fail to understand how one can live in today’s society and not grasp the problem of extending time preference so that we see all actions and outcomes in both their short, medium and long term contexts. Running from an unnecessary battle for political reasons is very different from both running away from your history, and your own failure as a nation, and your responsibility as a nation for the problems you created. The Yanks won almost every battle in Vietnam. The loss was political, because of home political tensions not a military or economic defeat. And it still achieved it’s strategic ends. As did subverting the soviets in Afghanistan. Democracies lack the stomach for sustaining war. And they do so because of people like you. Of course, such sentiment comes comfortably to Brits, who lost their entire empire trying to stop Germany from taking it from them. Frankly the world would be better off if we had let them. Certainly Americans would be – we would not have to become an empire and live under a government-of-empire, if we did not have to take over the British empire when Britain collapsed, like reed. We would not have to protect a world trade and financial system that only served to inflate our entablements. We would not have to deal with the after effects of poor British (and French) judgement that left behind a post colonial Network of violence and poverty around the world. Brits are a silly, petty, pointless people who inhabit little more than an empty client state living off it’s heritage, and propping up it’s ridiculous system by immigrating it’s way into a temporary fictitious prosperity, by fomenting consumption at the expense of it’s heritage and culture, at the expense of producing increases in productivity, where the government consumes 50% of GDP, the military is only slightly less of a Potemkin village than is the laughable Canadian. I expect this kind of behavior of the french, who ceased being a world power when the effects of killing off their aristocracy and descending into Bonapartism ( democratically justified totalitarianism ) and are happy today to simply rest on past glory, consume their accumulated historical investment in a single century, and who because of it are simply obstructionists – obstruction is the only political power they have – so it is the political power that they exercise. Brits are happily self-congratulatory to live under the US common man’s soldierly umbrella of protection, and his society’s necessary militarism while criticizing him on a daily basis. (( What will happen if the middle-american cultures who supply military talent ever figure out how much contempt that they are held in both by their coastal and international critics? )) A “thank you” might be more appropriate than your petty slander. But then again, while no man is a hero to his debtors, a decent man does not slander his debtors. Only an indecent one. False wisdom is the last refuge of the weak whose current technique is to hid behind the cloak of intellectual and moral fraud. But then, isn’t that the purpose of all religions?

  • Contra Mises and Rothbard, and Aligning Mises, Hayek and Hoppe With Weber and Pareto

    I dont like to criticize postings at the Mises Institute, of whom I have been a member and supporter for almost a decade. It is far less work to improve on small errors than to solve catastrophic ones. And therefore less work, and more reward, to criticize your friends in the hope of making progress, rather than undertake the vast effort of correcting your enemies in a vain attempt at altering their desires, when their arguments justify their desires rather than their desires being the outcome of good argument. There was another recent posting on the MI blog regarding the use of private property. It proposes unlimited permission to use private property for private ends. And, I simply don’t like this facet of libertarianism. I don’t think it helps our cause. It’s not that I have sentiments against these kind of arguments. Its that I know that these arguments are not only false, but they’re fraud – theft. And if property and freedom are the underlying principle of libertarianism, then theft is the opposite of libertarianism. And the article by David Albin entitled Historic Preservation VS Private Property Rights is an example of how libertarian thought has incorporated the justification of fraud and theft into it’s doctrine by defining property to PERMIT fraud and theft. And, I see it as my duty, and that of any other seeker of freedom, to undermine any such doctrines so that we can continue our efforts to correctly identify the scope of powers that we must endow to the minimal state so that we may preserve our freedom (juridical defense), our property (registries of opportunity that permit economic calculation), and our prosperity (hours gained and prices decreased by dividing knowledge, labor, and and time.) The reason I have a problem with these errors, is that they have consequences. In particular, such errors as Mises and Rothbard (and Rand) have inserted into the discourse, have tainted the school of thought we call Austrian, such that some members of the libertarian movement are abandoning the term Austrian and adopting the general “libertarian” label, in an attempt at creating distance from the Rothbardians who are trying to legitimiza themselves by adopting the historical label of “Austrians”. In this broader context, the article, as as an example of the errors in the movement, is a proponent of fraud, is counter intuitive to the civic republican tradition to the extent that it appears to freedom seekers as either immoral or criminal, resulting in decreasing adoption of the principles of freedom. It weakens the insight that Hoppe has given us into democracy, monarchy and their corollary the coordination and calculation problem, deprecates the good Austrian thought of Hayek, Popper and Parsons, discounts the valuable part of Rothbard’s analysis of property and incentive, and taints Mises accumulated scholarship and wisdom by emphasizing a failed system of logic (Praxeology) — which failed because of it’s erroneous definition of property and limited definition of action, the logical necessity of which it purports to rely as an observational science in an effort to justify it’s conclusions and therefore act as a functional abilty to persuade people to adopt policy and political ends. This error is both a moral hazard and an intellectual one. intellectual because it advocates something that the movement specifically exists to support, and Moral because it does not facilitate the preservation and advancement of freedom. I have taken on the labor of rewriting a number of chapters of Human Action by Mises such that the statements are positive and do not incorporate the errors caused by Misesian limitations on action, and Rothbardian limitations on property. Hayek likewise could be corrected for his use of sensory order rather than calculative order, and thereby making the sentiments in traditional knowledge as he defines it, articulable in Rothbardian language. Approaching the works of these authors with these corrections is useful for both my self education, but also for revising the vast doctrine of examples and a priori language that have been build up in the field. This is a heroic effort, and I may not, partly because of the age at which I started working full time on the problem, be able to complete it. If I make a dump on my property next to yours have I not stolen from you? If a man wishes to use violence against you, is that not because he feels his property has been stolen? Isn’t this the entire premise of libertarian property rights, which is, that the state has allowed violation of property rights (by pollution in particular) in the name of ‘social good’? What’s the difference in going to a city council and asking to resolve disputes and going to a judge to resolve disputes and going to a sheriff, or priest, or tribal elder to resolve disputes? The answer is just the different criteria that the judge uses to determine his ruling. A city council who asks you to absorb losses is different from the city council who prevents you from speculating (in this case, that’s what’s going on, speculating.) Speculating is a risk. Quite unhappily for my friends here, individual property as a conceptual institution and it’s political institution of juridical defense (what we called freedom) is an outgrowth of the european system of fraternal defense, and in particular, fraternal defense of cities. While there were origins in greece’s fraternal order, the egalitarianism of the Civic Republican tradition is a european artifact – and a Germanic one at that. People ‘pay’ for property rights by restraint: by forgone opportunity. They pay for the political institutions by forgone opportunity. These costs are more substantial costs for the strong than for the weak. The ongoing justification for property rights is a) production increases in the division of labor and the decreased consumption of time, and the resulting reduction in prices, b) the conversion from a tax to a credit society allows a development of a code of laws for different social classes who are more productive or less productive than one another, and as such the cost of administration of a populace is distributed across the population. c) the decline in violence between groups who would otherwise resort to violence. d) the virtuous cycle resulting in the fulfillment of wants and needs. If I act to decrease the value of your property either directly or indirectly, why are you not simply STEALING from the pool of forgone opportunity investment? In other words, if other people who are affected by secondary costs REFRAIN from attempts at development they are paying an opportunity cost. If they codify this cost as a PROPERTY RIGHT by registering that loss with a property registry (the council) then anyone’s attempt to circumvent those registries is simply an act of fraud and theft, using the ruse of property rights to steal. That is the correct application of libertarian (hoppian) property rights, because those are the set of both the ACTIONS (costs) and RESTRAINTS (costs) that people take in order to make use of hte institution of private property. The attempts by certain sects of libertarianism to undermine this process of property rights is NOT the defense of property rights but a SCHEME for organized THEFT. This ‘sect’ of libertarianism is very easy to identify once we use the Misesian Doctrine that you can ACT by acting and ACT by not acting. You can also pay costs by ACTING and pay cost by NOT acting. There is no difference between a joint stock company and a city council as long as teh council is taking deposits on forgone opportunities RATHER than exploiting forgone opportunities. There are many types of property registry. It is the transformation of these institutions from property registries to political forces by which property can be extracted from forgone opportunities, rather than registries are a collection of forgone opportunities, a joint stock company, by which people can use micro payments of forgone opportunity to capitalize their efforts. To capitalize wealth by INACTION rather than action. To capitalize opportunity costs. This may be a big leap, but it is the missing part of Mises->Hayek->Rothbard->Hoppe, and the theory of human action embodied in Mises work, and personally, I find it a convenient means of attempting to STEAL from the wishing-well of deposits made over time by various people of all strata in an attempt to privatize wins and socialize losses. Mises made a mistake because he had too narrow a view of social cooperation, possibly because of his upbringing. (which Hayek noted.) Hayek was not able to correct mises, largely because he was distracted by his concepts of Sensory Order (because of his upbringing), and to turn his observations on common knowledge into action statements as did Mises. Rothbard continued to make progress but relied upon natural law, either as a means of avoiding the underlying problem or simply because he could not see the underlying problem. I see it eitehr as avoiding the problem, or a distraction resulting from egoism. Hoppe has almost corrected Rothbard’s bias. But these systems of thought all focus on visible actions and costs rather than the less visible forgone actions and costs. They justify ignoring them because they are hard to measure, then happily justify their desire to expropriate from the common man precisely BECAUSE they ignored these forgone opportunity costs. I am unable to fathom whether it is by malice or error that these ideas persist. However, failings aside, the anarchic research program has made it possible to undermine the assumed “calculative” necessity for government as we have envisioned it for millennia and to replace that error with a superior “calculative” tool of cooperation – capitalism. But the continued attempt to ignore the forgone opportunity costs and focus only on money costs, is simply an attempt at the deceptive theft, by fraud, not trade. Let me repeat that: A statement that relies upon property rights rights, but is SELECTIVE in the definition of PROPERTY, and specifically to apply infinite DISCOUNT to forgone opportunity costs, is FRAUD. Period. Either all costs are opportunity costs or they are not. Selective attribution of costs is simply FRAUD. This statement will have, or should have, as much an impact on libertarian thought as did natural rights. And if it does not, then there will cease to be a movement. Because the reason that conservatives and libertarians fail to achieve significant political success is that they have failed be able to articulate those elements of their framework such that they can provide a POSITIVE solution for humanity, rather than a resistive one. And in particular, the argument that says we must rely on the MORAL position of libertarianism is simply a TRAP so that we can further ignore the forgone opportunity costs paid by all people in a society. Instead of a specious moral mandate, the problem is one of coordination, and as a problem of coordination among large numbers of people, where there senses are inadequate to provide needed information for decision making, the answer, rather than moral, is ‘calculation’. Because ‘calculation’ is the only means of extending our perceptions such that we can make increasingly complex decisions. Even if the ‘number system ‘ we use consists of time and property, and the numerical system we use is to gain efficiencies in perception on the use of time and property. From this standpoint, Mises and Hayek are not opposed. They are both inadequate with Mises solving the individual cost problem, and Hayek solving the opportunity cost problem – albeit in terrible and ineffective terms. Rothbard is inadequate as was Mises. Hoppe took us farther and compensated for some of rothbard, almost breaking out of the Rothbardian limits and simply returning to the problem of incentives and knowledge. We have spent a century trying to use money as our sensory system and means of analysis. Mises created or at least elaborated on a theory of action, while missing the underlying economy of forgone opportunity. Hayek and Popper dealt with the problem of ignorance. Pareto and Weber dealt with the problem of knowledge and bias. Parsons did his part as well. But these men all failed. Instead, the answer was sitting there in the socialist calculation debate. What surprises me is despite the obvious nature of that answer, and the predominance of misesian thought, that the history of human political operation has not be rewritten to accommodate it. “The greatest forgone opportunity cost is by the strong, who do not simply conquer the weak, but instead demand tribute for their institution of property rights as their lowest cost means of profiting by handling exceptions.” Individual property is the result of the defensive tactics of the fraternal order of soldiers and the need to enfranchise the population. This is the very opposite of the religious dictums proposed by all to many libertarians. Peace and property are the result of the use of and organization of violence. The state is the application of organized violence. It is the abuse of that violence by members of the state to steal from the forgone opportunities for violence that have been paid into the wishing well, and paid for, by constant recapitalization, the institutions and habits we call freedom, and it’s calculative tool, property rights. The question is not what happens with one man on an island. It is, should a thousand of us be put on an island, what happens? Island myth is false at it’s outset, and therefore all that follows is false as well. Again, since I learned more from these people than anywhere else, and I believe desperately in their mission, and I respect them immensely and call a number of these people friends, I am not criticizing any intention or character. I want to advance that mission. But to do so I think that the Misesian-Rothbardian error needs to be corrected for libertarianism to provide the intellectual leadership that conservatism needs, and to finally offer a positive solution to compete with the utopianism of the socialists. Curt Doolittle

  • IEA Thinks Taxis Are Not A Public Good

    Over on the IEA Blog, Eric Masaba asks the question: Why do black cabs cost more than Concorde? I couldn’t point out ALL the holes in this article, because the IEA blog limits the number of characters per comment. I find the argument for the virtue of brevity a ‘cute’ one because affirmations are the most brief of comments, while refutations are the longest. The state subsidizes the ‘Black Cabs’ of London.

    Hackney cab drivers inexplicably enjoy a rule stating that no one else can describe a taxi service as a “taxi” in their marketing, and the important restriction that no one else can pick up passengers on the street. These regulations have deep historical foundations, dating back to the days of Dick Turpin. In today’s world, they are anachronistic, anti-competitive and pointless.

    London cab drivers are a pleasure to deal with. They are an intrinsic part of the tourist trade. The Danes pay an entire social class to stay home so that the average clerk in a train station is educated, literate, well mannered, and a pleasure to deal with.

    When there are price comparison sites for insurance, airlines, hotels, holidays and office supplies, where we can buy the same product from a myriad of suppliers at different prices, how is it that there are very strict rules requiring that Hackney drivers receive a minimum wage for every mile driven yet private hire drivers do not?

    Because the market is an unlimited physical space and the streets of London are a limited physical space (and the tube is a monopolized space. And therefore Cabs require a very simple set of regulations in order to maintain quality.

    Why is it good for certain stripes of taxi driver to be able to oblige people in London to pay higher rates than the market would support if such a law was not in place?

    Why is it a good for the state to regulate any kind of competition?

    Why do the same drivers, who expect to be able to choose what clothes they wear (and how much they pay for them) and which airlines and car insurance firms they use, want to deny travellers in London the basic freedom to choose another vehicle service they can hail at the airport or on the street?

    They don’t. You can hire a car from the airport. You just can’t pick someone up on the street.

    If people want to pay for the superior knowledge that the Hackney drivers clearly possess, they will do so. If they do not care, they will find cheaper alternatives until the market has informed the black-cab community what customers really think and what price they are willing to pay.

    They are not paying for the knowledge. The state is using a knowledge criteria to create a hurdle for market entry. Just like they do for just about every kind of specialist.

    Many people are disgusted with the special treatment bankers received, but through the price controls and regulations on taxis in London, transport markets are being distorted to favour one type of vehicle provider.

    Bankers recieved special treatment because the state printed money without regulating it and forced banks either to compete for profits or to go out of business. This process of moral hazard created large banks that are pseudo governmental agencies, that were so responsible for subsidizing the national payroll and cash disribution and management system that if they were not rescued then the crash would have been worse. On the other hand, the state CREATED the moral hazard. But it did not have to. The problem has been that creating the ‘rules’ of the fair game in banking (defining the properties of property and it’s rules of transfer) has become extraordinarily complex because the object of definition has become exceedingly plastic. Derivatives and new financial instruments were a new form of property that many of us decried at the time, but that was unregulated because both the state and the purveyors of these new devices foolishly bought the argument that it was possible to insure that kind of risk, and secondly, because So, I have to disagree with the IEA’s position. Travel to NYC, Chicago, LA and ask yourself if the London policy is better or worse for everyone involved. And if we subsidize transportation like subways why cant we subsidize Cabs. If price is a concern, then If you want another choice, call a less expensive cab company on your cell phone. Prices aren’t everything. In fact, low prices and full competition in a market often accomplishes the lowest cost service at the lowest quality that is tolerable by consumers, and bars quality from availability within a geography. (Home Depot and Walmart in the US, and superstores versus butchers, bakers and the like in Europe). I am happy that superstores exist to provide additional choice, but only if there is a replacement ‘tax’ for using them by distancing them. From this simple analogy of taxis and tubes versus superstores and specialty stores, we can illustrate that reduced prices and a free market within geographic boundaries produce commodities, and thereby prevent societies from capitalizing long term values of aesthetics, choice, and the ‘special’ environments we adore across all of europe in favor of a bland, disposable environment. We restrain competition in order to raise prices and therefore concentrate capital and we do it in many ways: political subsidy (money transfers like taxation, redistribution, and outright subsidy) constraining the market by qualification (lawyers, doctors and london cabbies), and constraining the market with monopolies (public transportation like Tubes and Buses). We unrestrain the market to reverse the concentration of capital and to reduce prices, and we do it in many ways: political subsidy of The natural order of man is to attempt to circumvent the market. The free market is a byproduct of the civic republican tradition’s advocacy of meritocratic equality. It is a rebellious movement against the control of markets and the expropriation of wealth by the state. Markets are a solution to corruption that asks us to create fair competition among equals and to maintain that set of ‘rules’ we call “competition in the market”. However, the natural behavior of man is to circumvent that market. The means by which he circumvents it are those tools we consider fair market competition: reducing prices, increasing choices, advertising and marketing. Not all cultures have taken this route. In fact, in history, the free market is an exception that concentrates wealth in hte hands of the monied, productive and creative minority. THis concentration benefits all by decreasing prices for nearly everyone. It limits the power of capitalists as long as there is enough money in circulation to create inexpensive competition. But since the culture or state determines the definitions of property (the means of calculating the use of opportunities to act) the rules for any ‘game’ are particular to that game. Rules are not universal to all games. They are plastic. And this comparison of Taxis to Tubes is perhaps one of the best ways to illustrate that these rules are inconsistent. But what may not be obvious is the DISTORTION that is created by the myth that rules must be equal for some things and unequal for others. Or, that lowest prices are the ultimate virtue to be sought by economsts and political economists. As a libertarian, I care that the choices available to me are not constrained by Concentrating capital attracts talent to the private sector where it is skimmed by private individuals, and those who lack talent to the public sector where it is skimmed by bureaucracy. Yet this is what most cultures seek to impose: expropriation by the bureaucracy. WE also constrain capitalists, and unconstrain capitalists. Capitalists can temporarily distort a market by applying capital that profits one company or anotther, requiring competitors to rely upon capital or depart. They can do this by simply extending debt, so that prices may be decreased in the anticipation of driving competition out of the market, and later increasing their share of the market as these competitors disappear. the problem with this technique is that talent accumulated in the industry is sometimes forced out. Niches are abandoned (the wall mart and home depot effect). The state acts like a disruptive capitalist creating temporary price decreases in return for decreased niche services, and in doing so makes it impossible to concentrate capital in niche excellences. It makes it impossible to subsidize a public good: choice of the more expensive, better, prettier. The purpose of the London cabbie is largely to create a public ‘good’. It enforces quality so that quality personnel can afford to work in the industry (rather than the horrid service, delivered by the filthy, ignorant and incompetent in US cities). Prices would drive down quality, and all that will happen is that you will need additional regulation to managed an impoverished and corrupt network of marginal businesses that deliver cheap but intolerable service that prevents quality competition from competing in the market. If you are willing to spend money on the tube. You have no argument against spending money to maintain a quality system of taxis. Just because market mechanics are POSSIBLE for taxis and IMPOSSIBLE for tubes, that doesn’t mean that taxis are not serving the same function as tubes. Lowest costs does not generally create a good. It creates a marginal enterprise. Aesthetics are forms of capital that are perhaps, the best investment that any civilization can make. For a country like the UK, whose history is an industry, you’d think that such a principle would be better understood. For a country that is creating demand through immigration, cash by selling off it’s assets, and the illusion of prosperity by dilution, inflation and redistribution, rather than by increases in productivity, it is understandable why a myth of exceptionalism would be a useful distraction from the fact that the UK is selling off its exceptionalism and it’s heritage, and would do even more so along with it’s taxi subsidies. Prices alone do not a world make. The purpose of the market is exploration. The purpose of unbridled market is prevent government exploitation. THe purpose of the regulated market is to capitalize SOMETHING for a social good. And not all social goods are consumables. Some social goods capitalize distortions to create beauty, which is a high return for a society, as all monuments, arts and architecture demonstrate. So, instead of universally pursuing consumption as an ultimate good. Instead of the keynesian virtue of spending. Perhaps we should balance our capitalist strategy with the art of saving. It took english civilization a very long time to create a culture of saving, and the institution of interest, so that the middle aged could save until they were old, and the old could lend to the young, in a virtuous cycle of investment that distributed the risk of long term calculation across a vast number of people, and wherein retirement security was an insurance scheme for the underclass rather than a mandate of the majority. This virtuous cycle was undermined. Perhaps we should return to it, and to other forms of capitalizing our civilization, so that we leave something behind for our heirs rather than the record of a visitation by locusts. Subsidizing quality is the entire point of aesthetics and the arts. And capitalizing everything from street signs, to cabbies to historic buildings to libraries and museums is an antidote to anti-historicism.

  • People ‘Earn’ Redistribution By Controlling Their Breeding

    Another Empathic Appeal for the poor on NewsJunkiePost.com, entitled, Poverty: Half The World Lives On Less Than $2.50 A Day Unfortunately, the first prerequisite for prosperity is to control your population’s breeding. The worlds problems are not ‘density’ or ‘pollution’ or ‘capitalism’ but the transfer of life-extending technology to peoples who do not the cultural ability to control their breeding without the limits set on life by agrarian food production. For thousands of years, food production and disease gradients have limited population for people who lack the personal and social technology to control their birth rates so that they may stay within their productive means. Then we in the west, in our compassion, and in our lust to profit, sell these people life extending technologies without demanding that they control their birth rates. Were we to distribute all the wealth of the west to these people they would simply consume it and would match their reproduction to all increases in production, impoverishing the west as well. The division of knowledge and labor, the resulting increases in production, and the virtuous cycle of lowering prices because of this increased production are only one half of the equation. The control of breeding in the (protestant) countries is the other half of the social problem. More countries need a one-child policy, and the infrastructure to support that policy. Unfortunately, corruption is so rampant in these breeding-centers. Thankfully the rate of capitalism’s transformation of the world from agrarianism where children are a productive asset, to industrialization where children are a very high cost, is slowing the overbreeding problem in the ’second world’ of organized states. Incorporation of women into the workforce further controls breeding, and often too much (Japan and Russia). The reason we need women’s participation in the work force, especially in poorer countries, is so that they do not breed their civilizations into permanent poverty. The problem isn’t money. It’s cultural discipline. If we are going to even discuss mobilizing states to correct poverty then we should mobilize states to control breeding. Otherwise, along with our technology of life extension we are simply handing a murder weapon to a madman. “In other words, in 2004 about 0.13 percent of the world’s population controlled 25 percent of the world’s wealth. If we consider the global spending priorities of 1998, the trends were already extremely alarming.” Most people who read have heard of the 80/20 principle. Which means that 20% of the people control resources. This principle was developed by Vilfredo Pareto, for whom it’s named the “Pareto Principle.” He used quite a bit of data to show that in England in particular, 20% of people controlled about everything, and that income was rewarded accordingly. This also supports the value added by people. Despite our rhetoric of egalitarianism and equality, the top third of people are more productive than the bottom two thirds combined. And, at least it appears, that the top twenty percent are more productive (have more impact on generating goods and reducing prices) than the rest combined. The problem for any society is allowing the most productive people to concentrate sufficient capital that they may raise the population into prosperity. After which it’s possible to implement programs of redistribution. you can’t share what you don’t have. Unfortunately, the only value most citizens have in an economy is to provide menial labor and to consume goods and therefore create demand for goods and sevices. Imbalances in assets are needed to allow the creative and productive members of society to concentrate capital (which is the ability to influence others in an organized fashion) so that productivity can be increased. There is no record in history of this system of wealth concentration being abated. If it IS changed, then the vast majority of people on this earth will rapidly die. The problem is instead, to control reproduction and to increase production and continue the ‘virtuous cycle’ while we live within our means, so that we can redistribute something on the order of 20% of our wealth to those who have EARNED that right by the cost of forgoing further reproduction. In other words, you EARN redistribution by controlling your breeding.

  • Conservatives Cannot Articulate Their Promise, And A Warning Is Not Enough

    The conservative movement lacks skill in articulating it’s position. It does so because it has shifted from the intellectual debate of the 50’s and 60’s to the emotional debate of the post 60’s era. It has, unlike the libertarian movement, failed to provide a vehicle for educating conservatives with POSITIVE statements rather than negative castigations. Conservatives have largely failed to develop a language and ‘scripture’ because they do not have a solution other than to return to the nineteenth century classical liberal model. That model will never rise again. It only occurred because government was very weak, and the individual entrepreneurial need to expand and populate the continent required both private ambition and private capital. It required the conversion of resources into taxable resources, which would empower the government. Conversion requires business people the way conquest requires soldiers. And therefore commercial society was in control during that period. Our current problem is not to convert land into taxable assets. It’s to maintain the international system, and our ability to financially manage the international system. We have been paying for it by trade advantage for some period of time, and then selling dollars for the past forty years. Liberals do not want us to maintain that system but they want the rewards that come from it to be redistributed. Conservatives object to this position. Neither really understands that there is no american exceptionalism except american military exceptionalism. Our future problem is that in redistributing the wealth of that military network of trade and banking we have directed too much of the profit to bankers and not enough to the citizenry. Conservatives do not like this privatization of wealth any more than liberals do. But most importantly conservatives do not like being castigated and treated as Being conservative simply means taking a gradual approach to social change and particularly with respect to the financial, family and military traditions. It means being skeptical that our visions of the future will come true, and looking at the world as what people ACTUALLY DO not what we WISH they would do. We as a nation are notorious for predicting an optimistic future that cannot or has not occurred. The dialog around our prosperity is often inaccurate and self-congratualtory rather than factual. We have transformed our culture of evangelical christianity into one of evangelical democratic secular humanism. Conservatives are skeptics. They may speak in antiquated language, because that is their language. They may fail to articulate their position effectively because of that language, but they ACT conservatively, think conservatively, and treat the world conservatively. This is why conservatives are, in general, more prosperous – and frankly, happy. And the sacrifices that they make in order to be prosperous are material to them. They remember them. And therefore they resent those sacrifices being ‘spent’ by others who do not make the same sacrifices. Monetarists and capitalists are not conservatives. They may hide under conservatism. But they are not conservatives. The conservative class is a military, middle and craftsman class and it always has been and always will be. It is the ‘residue’ of the european fraternal order of soldiers at the bottom, and at the top, it’s a ‘residue’ of the middle class movement that revised and adopted civic republicanism during the enlightenment as a way of transferring power from the kings and church to the middle class. it is an alliance of the military and middle class. Liberalism (socialism, communism) is a ‘residue’ of a union of the priestly cast and the peasantry. Academia is simply an outgrowth of the church. The peasantry has always allied with the church, and the church has always had power because of it’s support by the peasantry. And that said, we do not have a separation of church and state. Our state religion is now democratic secular humanism. We are now a state-run-religion using the myth of division of church and state to oppress (or reform) religions so that we can have a state sponsored church. That’s it. That’s the articulated conservative position. The republican party collects conservative coalitions. The republican party is not a conservative party. conservatives join the republicans because they have no choice. They see the party as corrupt. People are complex and only join parties because of limited choice mandated by our ‘winner takes all’ form of government, which fosters class warfare. In fact, all political decisions exist on a spectrum or bell curve. There are a myriad of political decisions to be made. There are a myriad of people with different abilities to understand each political opinion. Each person is interested in a myriad of decisions. Parties are collections of people with opinions. Very skilled people tend to be highly unsatisfied with party choices. Very unskilled people tend to simply support their party of nearest interest. Parties therefore pick platforms that make enough people happy that they can get into power. arguing that conservatives want to keep things asa they are, is a silly argument. The objection is simply illogical. The question instead, is whether liberals propose a solution that conservatives can live with, and wether conservatives can propose a solution that liberals can live with. If we had listened to the liberals in the last century we would have ended up like either Russia or China. If we had listened to conservatives we would not have had our progressive social changes. It’s the competition of ideas that gives us the choice as a body politic.

  • Yes We Could Have Prevented The Suffering Of Citizens

    Rebekka Grun, on The Growth And Crisis Blog writes that we could have protected the consumers rather than the banks, in her posting Conditional Individual Bailouts – a Potential Anti-crisis Instrument

    Why not save the individuals that went bust rather than their banks? Unconditional bailouts, of course, would generate the wrong incentives (for the banks as well, by the way). It is therefore important to attach smart conditions to discourage free riding. For example a course in financial literacy and commitment to a program of (maybe painful) debt restructuring, and possibly further measures to improve the education or health of the affected individual or family.

    Your sentiment is correct even if you haven’t done the math on it. In general terms, there is a simply technique for doing exactly what you’ve suggested, but we lack the infrastructure for it. The arguments against the solution at the time were that we didn’t know how far prices would fall (I’m not sure, I think we were about right), and that it would make very visible that the government was the source of the problem (true), that it would have geopolitical impact on the value of the dollar (of course, but so would the alternative), and that it could be unfair to people who had behaved well (that would be fixable), and that it would encourage a bubble (this is false). THe primary problem with distortions is that the distortions are in PRICING. Libertarians would call corrections ‘repricing’. The problem is that human beings must suffer a great deal and absorb a lot of stress to conduct that ‘repricing’. When the state, as the creator of the distortion by the manufacture of cheap credit, could easily reprice major (home) assets by repricing the DEBT of those assets. In other words, we could have easily corrected the economy by bypassing the banking system, and giving money directly to the citizenry as buy-downs on their mortgages, which would have provided them with cash to spend or to put into banks. Doing this is fine if you do it FAST. In other words, the state created both the BOOM problem and the CRASH problem because it relies on the irresponsible tool of providing general liquidity – easy money. In hindsight this is more obvious than it was at the time. Those of us who made this recommendation were the smaller voices, because the banks and the financial industry were so terrified and the impact on the economy if they failed, so severe. The problem for our country is to put this system in place, so that we are insuring citizens AGAINST their bankers, so that we can use the market to PUNISH bad bankers and their investors, rather than the citizenry. I’ve worked the mechanics of this process out in some detail, and it’s quite simple. It’s just novel. And it’s anti-bank. And that makes it dangerous to a lot of people in one of our biggest industries: finance.