“Permanent gold backwardation will trigger hyperdeflation ‘with the certainty of scientific law’. ” – NASOE
You know, I’m not a hard money bug, but I cannot disagree with this statement. But there is a solution other than gold, it is, ‘calculability’, or the requirement for returns on credit issued at interest.
Source date (UTC): 2013-12-26 11:34:00 UTC
INSURED, FREE RIDER VS PARASITE – The Spectrum Of Free Riding.
Terminology conflict: “Free Rider” vs “Parasitic”
In dry economic language, we use the term ‘free rider’. In libertarian language, we use the term “Parasitic”.
Free Riding refers to the in-group relation between producer and free rider – in group, in-family, free riding is a form of redistribution.
In the North Sea Model, Parasitic is accurate since the unit of cooperation is the absolute nuclear family. And free riding even upon parents is prohibited. So parasitic is the correct out-group description of the affect free riders have on the producers.
I had always considered ‘parasitic’ a loaded term. But it’s not. Turns out that it’s accurate.
Although propertarianism has led me to conclude that I do not see a problem with insuring people against destitution, I so see a problem with parasitism and free riding.
Source date (UTC): 2013-12-26 07:40:00 UTC
“Mises’s contention came in setting the context for Human Action by explaining why people have had such a hard time accepting the validity of (Austrian) economics as a field of knowledge–it does not fit in with anything else.” – Konrad Love you man, but I want to clean this up a bit. And I hope you will forgive me for using your statements as a jumping off point to articulate this subject a little more clearly than is usual in our field. 2) The first is your statements (a) “put into context” and (b) “human action”. Praxeologically speaking, any statement regarding human action, not stated as human action, is untestable by praxeological analysis. As such, if you can’t say something in operational terms, then it is possible that you are mistaken, or misled, since only such operational language opens any statement to praxeological testing. Mises was trying to refute socialism. He was frustrated because there was not empirical means of demonstrating that it wouldn’t work. So he had to rely on rational deduction. He was attempting to show (as was popper by very different means) how socialism was impossible – particularly, the socialist method of production. Praxeology was his attempt to use the very clear, irrefutable, sympathetic test of the rational incentives of actors given their need to act in real time, to refute the theory that humans would act by the same means without money and prices. Without money and prices, and the incentives that they make possible, humans cannot rationally act. He suggested, and argued poorly, that humans literally could not think, in the same way that we would be radically impaired in our thinking, without the use of numbers, numeric operations, ratios, measurements, and the syllogism. As such, if people cannot cooperate rationally using property, money, prices and time, then in fact, no science of economics is therefore possible. We cannot conduct a science predicated on a unit of measure dependent upon property and prices, if neither property nor prices no voluntary cooperation exist. That is non-logical. We should note that this is an argument, now proven, both logically and by evidence, that the socialist method of production does not work, precisely as Mises predicted, because Calculation and it’s obverse, Incentives, are impossible. But this is a limited criticism. We must understand that the limit of Misesian criticism, is the socialist mode of production. It does not mean that progressive taxation, especially by simply increasing transaction costs at the high end, and redistributing the fees on those costs to consumers, or investing them into infrastructure violate the ability of people to think, plan, and coordinate their actions. The science of economics can in fact exist, if the logical method of measurement that it depends upon: voluntary cooperation using property, money and prices, does exist/ So the Misesian critique of economics as a discipline dependent upon human action is a refutation of the socialist mode of production, but it is not a refutation of the democratic socialist redistributive method of production. (Although I am not sure anyone else has said so this clearly. I haven’t run across it if so. Caplans ‘Why I am not..” is an obscurant, and meaningless argument which he later took the teeth out of himself : there is no difference between economic calculation and incentives. They are mutually dependent concepts. An argument which I forgive him for, and attribute to the folly of his youth. ) 2) The second problem you put forth is that people have a problem understanding Austrian Economics. And I’m afraid that’s just not demonstrably true. (a) the argument from the mainstream economics profession is that the insights of the Austrians have been fully integrated into mainstream economics. (b) The only remaining dispute that separates Austrian economists from mainstream economists today, is the theory of the business cycle, where by continuous distortions of the money supply, while long term neutral in affect on price, are non-neutral on the Sustainable Patters Of Specialization and Trade – largely due to little more than the fact that humans due to the process of youth, maturity, reproduction, decline in learning capacity (or increase in required repetitions), as well as normal aging, mean that not only are prices, and contracts ‘sticky’ but so are human lives and relations. And while we may ameliorate the problems caused by the stickiness of prices,we appear to have very little control over contracts, and the accumulated impact on individuals in the business cycle means that such cycles, the longer that they are perpetuated, force their members to become increasingly sticky, and if more than four years to nine years in duration, that it is no longer possible for individuals to transition at anywhere near the same quality of life. This may in fact be another argument against immigration which only exacerbates this problem severely. The last argument, and the one made by conservative advocates of Austrian economics, is not just the utility of the lost human capital, but the loss of moral capital, and the increase in demand for the state as insurer, now that the individual citizens have been placed at risk by the use of credit and insurance by the state, rathe than allowing the natural, and frequent cycle of PSST to discourage people from over-investing in any given pattern, and instead, developing dynamic risk protection given the constant reordering of such patterns. 3) The point being the one I articulated in my first response to your post: that the Austrian method makes visible the involuntary transfer of property, and the behavior of individuals within patterns of sustainable specialization and trade IF WE MEASURE patterns of sustainable specialization and trade as our category of measurement. (industry networks are the highest level of meaningful aggregation). And investment in trade policy and industrial policy should outweigh any interest in monetary policy. If only because those policies have been in use since the dawn of human cities, and appear to have worked well. Whereas, the use of Keynesian aggregates and monetary policy does not localize distortions and those distortions that are caused by such policy are not measured, or even measurable. Just as Einstein did not invent relativity(actually, constancy), Keynes did not invent his ideas either – he adapted them from Marx, and cut out the references to prevent criticism of what he had accomplished via even greater obscurant language than Marx: the forcible involuntary transfer of wealth and the consequential empowerment of the government as the vehicle for such transfer. All of which was justified as a means of decreasing unemployment. The sacrifice of the west for reduction of unemployment and facilitation of the expansion of the reproduction of the lower classes that had been held in check by private property and manorialism for more than 2500 years. The great weakness of human reason is our inability to disentangle multiple axis of complex relations. Only analysis of the voluntary transfer of property allows us to disentangle heavily loaded propositions and reduce what appears to be many competing and overlapping axes of causality to one simple factor: whether property, which is the necessary device for cooperation, has been voluntarily expropriated or voluntarily exchanged. CLOSING This is probably worth sharing or saving for later reference. Affections Curt Doolittle The Propertarian Institute Kiev
“Mises’s contention came in setting the context for Human Action by explaining why people have had such a hard time accepting the validity of (Austrian) economics as a field of knowledge–it does not fit in with anything else.” – Konrad Love you man, but I want to clean this up a bit. And I hope you will forgive me for using your statements as a jumping off point to articulate this subject a little more clearly than is usual in our field. 2) The first is your statements (a) “put into context” and (b) “human action”. Praxeologically speaking, any statement regarding human action, not stated as human action, is untestable by praxeological analysis. As such, if you can’t say something in operational terms, then it is possible that you are mistaken, or misled, since only such operational language opens any statement to praxeological testing. Mises was trying to refute socialism. He was frustrated because there was not empirical means of demonstrating that it wouldn’t work. So he had to rely on rational deduction. He was attempting to show (as was popper by very different means) how socialism was impossible – particularly, the socialist method of production. Praxeology was his attempt to use the very clear, irrefutable, sympathetic test of the rational incentives of actors given their need to act in real time, to refute the theory that humans would act by the same means without money and prices. Without money and prices, and the incentives that they make possible, humans cannot rationally act. He suggested, and argued poorly, that humans literally could not think, in the same way that we would be radically impaired in our thinking, without the use of numbers, numeric operations, ratios, measurements, and the syllogism. As such, if people cannot cooperate rationally using property, money, prices and time, then in fact, no science of economics is therefore possible. We cannot conduct a science predicated on a unit of measure dependent upon property and prices, if neither property nor prices no voluntary cooperation exist. That is non-logical. We should note that this is an argument, now proven, both logically and by evidence, that the socialist method of production does not work, precisely as Mises predicted, because Calculation and it’s obverse, Incentives, are impossible. But this is a limited criticism. We must understand that the limit of Misesian criticism, is the socialist mode of production. It does not mean that progressive taxation, especially by simply increasing transaction costs at the high end, and redistributing the fees on those costs to consumers, or investing them into infrastructure violate the ability of people to think, plan, and coordinate their actions. The science of economics can in fact exist, if the logical method of measurement that it depends upon: voluntary cooperation using property, money and prices, does exist/ So the Misesian critique of economics as a discipline dependent upon human action is a refutation of the socialist mode of production, but it is not a refutation of the democratic socialist redistributive method of production. (Although I am not sure anyone else has said so this clearly. I haven’t run across it if so. Caplans ‘Why I am not..” is an obscurant, and meaningless argument which he later took the teeth out of himself : there is no difference between economic calculation and incentives. They are mutually dependent concepts. An argument which I forgive him for, and attribute to the folly of his youth. ) 2) The second problem you put forth is that people have a problem understanding Austrian Economics. And I’m afraid that’s just not demonstrably true. (a) the argument from the mainstream economics profession is that the insights of the Austrians have been fully integrated into mainstream economics. (b) The only remaining dispute that separates Austrian economists from mainstream economists today, is the theory of the business cycle, where by continuous distortions of the money supply, while long term neutral in affect on price, are non-neutral on the Sustainable Patters Of Specialization and Trade – largely due to little more than the fact that humans due to the process of youth, maturity, reproduction, decline in learning capacity (or increase in required repetitions), as well as normal aging, mean that not only are prices, and contracts ‘sticky’ but so are human lives and relations. And while we may ameliorate the problems caused by the stickiness of prices,we appear to have very little control over contracts, and the accumulated impact on individuals in the business cycle means that such cycles, the longer that they are perpetuated, force their members to become increasingly sticky, and if more than four years to nine years in duration, that it is no longer possible for individuals to transition at anywhere near the same quality of life. This may in fact be another argument against immigration which only exacerbates this problem severely. The last argument, and the one made by conservative advocates of Austrian economics, is not just the utility of the lost human capital, but the loss of moral capital, and the increase in demand for the state as insurer, now that the individual citizens have been placed at risk by the use of credit and insurance by the state, rathe than allowing the natural, and frequent cycle of PSST to discourage people from over-investing in any given pattern, and instead, developing dynamic risk protection given the constant reordering of such patterns. 3) The point being the one I articulated in my first response to your post: that the Austrian method makes visible the involuntary transfer of property, and the behavior of individuals within patterns of sustainable specialization and trade IF WE MEASURE patterns of sustainable specialization and trade as our category of measurement. (industry networks are the highest level of meaningful aggregation). And investment in trade policy and industrial policy should outweigh any interest in monetary policy. If only because those policies have been in use since the dawn of human cities, and appear to have worked well. Whereas, the use of Keynesian aggregates and monetary policy does not localize distortions and those distortions that are caused by such policy are not measured, or even measurable. Just as Einstein did not invent relativity(actually, constancy), Keynes did not invent his ideas either – he adapted them from Marx, and cut out the references to prevent criticism of what he had accomplished via even greater obscurant language than Marx: the forcible involuntary transfer of wealth and the consequential empowerment of the government as the vehicle for such transfer. All of which was justified as a means of decreasing unemployment. The sacrifice of the west for reduction of unemployment and facilitation of the expansion of the reproduction of the lower classes that had been held in check by private property and manorialism for more than 2500 years. The great weakness of human reason is our inability to disentangle multiple axis of complex relations. Only analysis of the voluntary transfer of property allows us to disentangle heavily loaded propositions and reduce what appears to be many competing and overlapping axes of causality to one simple factor: whether property, which is the necessary device for cooperation, has been voluntarily expropriated or voluntarily exchanged. CLOSING This is probably worth sharing or saving for later reference. Affections Curt Doolittle The Propertarian Institute Kiev
Praxeological analysis, and Austrian economics, are important because they make visible all transfers, and whether or not they are against the desires of those from whom property is transferred. Aggregate macro economics and Keynesian economics are important because they obscure the transfer of goods against the desires of those from whom property is transferred. But, both of these methods: Aggregate Keynesian and Austrian Micro, are actually moral forms of analysis, more so than they are different sciences. If one subscribes to the proposition that all property is and must be private, then moral decisions are a function of voluntary or involuntary transfer of property. If one subscribes to the proposition that all property is owned communally and we all rent it and gain commissions on its use for the benefit of all (as under democratic socialism) , then the distribution of proceeds from the rentals is more important to the moral code than ownership and right to such proceeds. The collectivist proposition is that all property is owned communally and that we merely lease it from the commons, and gain some portions of our commissions on it. The libertarian proposition is that all property is privately owned, and we voluntarily contribute to commons at our own discretion. Any rational analysis of the evidence of economic inquiry from either the communal or private spectrum will illustrate that both forms of research have largely approached the same answers and discoveries of the increasingly complex properties of economic activity, over time. The difference remains the choice of moral bias determined by the allocation of property rights in a collective body under the same territorial monopoly of property definitions and means of dispute resolution. The scientific method is likewise a moral discipline. It prevents the use of a wide variety of errors and misrepresentations. This moral discipline will over time, because of the competition of ideas, suppress errors and fraud. Just as the market, over time, will suppress errors and fraud. The simplistic means by which the scientific method succeeds in this moral objective, is the requirement for operational language. That is, a set of observable actions open to confirmation and falsification. Praxeology, likewise implicitly mandates the moral requirement that we can express any action in observable, empirical form. It is likewise a requirement for operational language. Both the physical sciences, and praxeological science, place a requirement for operational language on all scientific and economic statements. This requirement for EMPIRICISM is what renders praxeology a moral science. As such: (a) Human moral intuitions, instincts, and norms are universally, a set of prescriptions enumerating the uses and non uses of property. (b) We can only make visible whether any action is moral or not, by operational language: determination of whether any transfer of property was voluntary. (c) The reason that we can perform a test of voluntary transfer is that as human beings we are marginally indifferent, and can through subjective experience, objectively determine whether transfers are rational for the actor. All the logical disciplines are moral disciplines, and all are instrumental methods, and we not only desire, but require these instrumental methods, because we in fact do argue and must argue, and must rely upon these methods, because those methods determine the use of property – firstly the property of our minds, bodies and time. We require property – albeit the distribution of property rights between individuals, families and commons varies greatly depending upon the structure of production and the structure of the family, and the homogeneity or diversity of the population in all of the above. But regardless of the distribution of normative, or descriptive ownership in property between the collective and the individual, This is the appropriate and defensible argument in favor of praxeology. Mises intuited it. Rothbard artfully defended it. But they had to because they lacked the knowledge that we have today. And instead, unfortunately, they relied upon a priori, deductive certainty. A reliance which doomed praxeology to failure in broader economic circles – by simple virtue of the fact that all of economics cannot be deduced from the axiom of action without empirical support. Very little can be deduced from it. Quite the opposite. But, while we can deduce very little, we can TEST ANY ECONOMIC STATEMENT praxeologically for rationality and voluntary transfer. As such praxeology is in fact, an empirical science, which we test by sympathy, not a rational one one. They got it wrong. Sorry. Don’t hang onto whether they were right or not. Revel in the fact that we now have the ability to understand that praxeology is a means of measuring and TESTING all human action for whether or not it is voluntary and rational (moral) or involuntary and non-rational (immoral).
Praxeological analysis, and Austrian economics, are important because they make visible all transfers, and whether or not they are against the desires of those from whom property is transferred. Aggregate macro economics and Keynesian economics are important because they obscure the transfer of goods against the desires of those from whom property is transferred. But, both of these methods: Aggregate Keynesian and Austrian Micro, are actually moral forms of analysis, more so than they are different sciences. If one subscribes to the proposition that all property is and must be private, then moral decisions are a function of voluntary or involuntary transfer of property. If one subscribes to the proposition that all property is owned communally and we all rent it and gain commissions on its use for the benefit of all (as under democratic socialism) , then the distribution of proceeds from the rentals is more important to the moral code than ownership and right to such proceeds. The collectivist proposition is that all property is owned communally and that we merely lease it from the commons, and gain some portions of our commissions on it. The libertarian proposition is that all property is privately owned, and we voluntarily contribute to commons at our own discretion. Any rational analysis of the evidence of economic inquiry from either the communal or private spectrum will illustrate that both forms of research have largely approached the same answers and discoveries of the increasingly complex properties of economic activity, over time. The difference remains the choice of moral bias determined by the allocation of property rights in a collective body under the same territorial monopoly of property definitions and means of dispute resolution. The scientific method is likewise a moral discipline. It prevents the use of a wide variety of errors and misrepresentations. This moral discipline will over time, because of the competition of ideas, suppress errors and fraud. Just as the market, over time, will suppress errors and fraud. The simplistic means by which the scientific method succeeds in this moral objective, is the requirement for operational language. That is, a set of observable actions open to confirmation and falsification. Praxeology, likewise implicitly mandates the moral requirement that we can express any action in observable, empirical form. It is likewise a requirement for operational language. Both the physical sciences, and praxeological science, place a requirement for operational language on all scientific and economic statements. This requirement for EMPIRICISM is what renders praxeology a moral science. As such: (a) Human moral intuitions, instincts, and norms are universally, a set of prescriptions enumerating the uses and non uses of property. (b) We can only make visible whether any action is moral or not, by operational language: determination of whether any transfer of property was voluntary. (c) The reason that we can perform a test of voluntary transfer is that as human beings we are marginally indifferent, and can through subjective experience, objectively determine whether transfers are rational for the actor. All the logical disciplines are moral disciplines, and all are instrumental methods, and we not only desire, but require these instrumental methods, because we in fact do argue and must argue, and must rely upon these methods, because those methods determine the use of property – firstly the property of our minds, bodies and time. We require property – albeit the distribution of property rights between individuals, families and commons varies greatly depending upon the structure of production and the structure of the family, and the homogeneity or diversity of the population in all of the above. But regardless of the distribution of normative, or descriptive ownership in property between the collective and the individual, This is the appropriate and defensible argument in favor of praxeology. Mises intuited it. Rothbard artfully defended it. But they had to because they lacked the knowledge that we have today. And instead, unfortunately, they relied upon a priori, deductive certainty. A reliance which doomed praxeology to failure in broader economic circles – by simple virtue of the fact that all of economics cannot be deduced from the axiom of action without empirical support. Very little can be deduced from it. Quite the opposite. But, while we can deduce very little, we can TEST ANY ECONOMIC STATEMENT praxeologically for rationality and voluntary transfer. As such praxeology is in fact, an empirical science, which we test by sympathy, not a rational one one. They got it wrong. Sorry. Don’t hang onto whether they were right or not. Revel in the fact that we now have the ability to understand that praxeology is a means of measuring and TESTING all human action for whether or not it is voluntary and rational (moral) or involuntary and non-rational (immoral).
BERMUDA
Ostensibly Zero Taxes. Common Law Courts. Great infrastructure. Nice weather. Most of the Fortune 100 are there.
Source date (UTC): 2013-12-23 08:45:00 UTC
http://blogs.wsj.com/economics/2013/12/19/how-to-stop-financial-panics-say-hello-to-qualitative-easingCONTRA QUALITATIVE EASING : INSURING ARTIFICIAL PRICE LEVELS CAUSED BY STATE MONETARY POLICY
(un-libertarian) (recession insurance) (PSST) (insuring against busts)
This solution in the paper that is referred to in the article is weaker than simply buying down debt on real property from consumers and SMB’s that do not have access to capital markets,in sectors of the economy undergoing crashes. Further, buying down debt by fiat allows the state to penalize lenders by paying them off at a discount, by fiat. This is a better incentive than regulation of inputs. Because consumers are protected by the state and lenders are harmed in terms profits but not balance sheets.
Reasons are multiple, but mostly, that the preservation of false price levels is distortionary, while the redistribution of discounted debt restores balance sheets. And specific sectors can be addressed quickly, which reduces downward pressure on prices.
In effect, by this method, the state insures large asset prices against booms and busts.
I recommended this solution in 2008, and Galbraith did as well, before he died.
And the longer I have worked on the problem the more certain I am that it is a MUCH MORE effective policy than either government spending or lowering interest rates. Neither of which help the PSST (pattern of sustainable specialization and trade) within a given sector.
Prices are information. We can insure the quality of information. And this method insures that bottom end of the asset price even if all profit is wiped from the transaction.
This puts cash in people’s pockets within a collapsing sector without allowing the repricing in that sector to easily spread to the broader economy.
Imagine if every home owner had received a formulaic payment against his or her home’s debt, and contributions to 401K’s for any balance over their debt amount. This would rapidly have put cash in everyone’s hands, while adjusting balance sheets, and would have stopped the fear of prices falling.
I’ve written enough about this. But the point is, libertarian or not, just or not, insuring state induced prices is the most effective technique for controlling the spread of relative price changes as they percolate through the economy and cause disruptions in additional patterns of sustainable specialization and trade.
Cheers.
Source date (UTC): 2013-12-20 03:09:00 UTC
FORCIBLE REDISTRIBUTION IS MISSED OPPORTUNITY FOR EXCHANGE
Forcible redistribution via taxation deprives us of the ability to ask for something in exchange for our earnings.
What we would most often like in exchange are conformity to norms (predictability of signals), and social status (reward).
If redistribution is politically necessary to prevent friction in politics, but undesired by the population, then the government needs to be broken up.
The reason being that governments that act on the behalf of constituencies can negotiate trade policy to effectively form redistribution from those who DESIRE to trade with others, versus those that do not.
Conformity is how we prefer to determine whether someone has access to our market. However, if they do not conform, that does not mean that they cannot extract from us something that we wish to give them in exchange for granting us access to THEIR market.
It isnt necessarily mandatory that governments possess a monopoly over territory. Collective trade bargaining can be conducted by currency differences. But only if currency is entirely digital – so that we can make use of many of them.
Technology makes interesting political options available to us today,t he same way that the invention of money made new political options available in the past.
It’s fascinating.
Source date (UTC): 2013-12-19 16:49:00 UTC
In our pretend world, we have a benevolent monarch. He resides in a city. The hub of a wheel. He administers the territory using a sales tax of 5%.
The city has 10,000 people living in it, or 1/2 of the total population.
The city is 100 acres x 100 acres in size, or roughly 4x4miles, and so the edge of the city is 2M from the center, and 30m walk. And 1hr total time to walk across.
Our geography is mapped out as a set of villages of no more than 1500 people.
Each building in the village occupies no more than 10K square feet of land, or, roughly 100 buildings, and therefore covers about 25 acres, roughly 5×5 acres, or roughly 2x2miles.
Each village 30 minutes walk apart (2 miles)
The closest village is 2m from the center, or 30 minutes walk.
The circumference the city then is roughly 12miles.
There are six villages, totaling 6×1500, or 9-10,000 people.
How much land for food production?
How much land for “wilderness”, on which one can either enjoy nature, or ‘hunt’ for consumption but not sale?
(It takes an absurd amount of land to feed hunter gatherers btw)
Source date (UTC): 2013-12-18 07:34:00 UTC