Category: Economics, Finance, and Political Economy

Karl Smith quotes Eli Dourado

It is perhaps unsurprising that those who think they benefit from the current system wish to keep it. They trot out all kinds of practical-sounding excuses for why we cannot completely open the border. All of these reasons have analogs in the system of class-based privilege. Most of us, I imagine, would like to think that if we were aristocrats of centuries past, we would see through the lameness of the arguments for using the state to keep down the lower classes. Yet the widespread opposition to open borders today shows that we are not that good.

Although Dourado repeats the less than novel convenient ‘metaphor’. It could also be restated as: ‘People demonstrably object to the forcible appropriation and transfer of their opportunities, their social status, their political power, their traditions and their culture so that those who have not earned it may profit by redistributing it to others who have also not earned it. People consider these things their property, and they act as if it is their property.” But let’s ask a few questions that the positivist does not ask: Just what is it that creates and maintains the behavior of forgone opportunity costs we call property? The high cost of truth telling? The high cost of non-corruption? Where to ‘incentives’ come from? Why are some organizations of people impervious to all attempts at quelling corruption both public and private? Conservatism is more complicated than Karl or Dourado suggest. Conservatism consists of a series of properties: (a) a general resistance to change in social order: the habits, manners, ethics, morals, and laws by political means. (b) In the USA, it consists of Jeffersonian Classical Liberalism, and the Civic Republican sentiments (real or not) and the predominant culture of the prewar era. (c) In the west it consists of the remnants of Fraternal Aristocracy — and all the social habits, myths and values that it entails. Railing against conservatives due to (a) and (a) alone, is a convenient ruse by which opponents ignore and fail to consider the value inherent in (b) and (c), and whether the system of property rights, and requisite costs that individuals must pay to create and maintain those property rights (in both individual an political spectrums) as well as the system of economic calculation, incentives and social status, that are implied in (b) and (c) CAN POSSIBLY be perpetuated WITHOUT (a). Especially given the different time preferences of the social classes. Each of these norms requires individual costs: each of these habits, these cultural forms of ‘capital’ is a cost born by the individuals who adhere to them, day by day, action by action, judgement by judgement. People treat as property that which they pay costs to acquire – even if they are acquiring a ‘norm’. if you take from them that property – even the abstraction of property we call tradition – they will cease paying for it, by abandoning the morals, ethics, manners, habits, and social status – even the very culture and government and nation itself. Because it is no longer an investment for them. Furthermore they will resent the theft of it. In their minds, they have financed a system of meritocratic rotation of elites by serving consumers in the market. Either there is a meritocratic rotation of elites through the service of consumers and society in the market, or there is a dictator who makes a non-meritocratic and arbitrary judgement such that none of us should attempt to meritocratically rotate elites due to service of consumers in the market. It is one or the other. Immigration is incompatible with the welfare state. It explains why small ethnically homogenous states are redistributive and empires are not. Because people PAY for their social status, their culture, their morals, ethics, manners, habits, narratives, and all other friction-reducing behaviors by acting as if they are making purchases. The more diluted the status, the less it is worth. If you steal the status, then people just stop paying for the state. And THAT IS WHAT IS HAPPENING TODAY. This is an Austrian analysis of human actions. (Versus some silly Rothbardian ideology, or some simplistic overly reductive positivist explanation) It is also Hayek’s criticism of policy. It is a claim against HUBRIS. In particular, an argument against the hubris of positivism. We are markedly different from other civilizations due to the secondary effects that were caused by the need of a technically superior but numerically weak fraternity of independently financed warrior-shareholders (Aristocrats), to hold the numerically and economically superior and totalitarian East at bay. This accidental social order led to the technologies of debate, philosophy, science, and the concepts of balance of power, contract, an independent judiciary, natural rights, personal freedom, political freedom, national freedom, and democratic republicanism – without which the western commercial order, and all that has come from it could not have evolved. And (as Hoppe has tried to illustrate) the behavior of monarchs as intertemporal guardians of property rights has been demonstrably superior to that of democratic socialists. If there is a man alive today that is capable of articulating how we can use a positivist technology to maintain the system of calculation and incentives, and the perpetuate the willingness to pay requisite costs in order to maintain the system of property, manners, ethics, and morals, non-corruption, non-privatization, over four generations of time without these conservative traditions, then I would like to meet him. Because despite a lifetime of attempting to find that some solution to this problem I cannot. Hayek failed, as did Mises and Parsons. Positivism is an insufficient and hubristic technology for a problem we barely comprehend, and the mechanics of which, at least in the aggregate, we are only beginning to discover. Children shouldn’t play with dangerous things.