Philosophy & Economics Philosophy & Economics Archives
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The Invisible Hook of the Market
When the last bastions of the old media go under, it will not be with a bang but a whimper. It will be a long slide, not a cataclysmic collapse. And for this we have piracy to thank. This is the saving grace of piracy, that it adjusts our economy to changes made necessary by [...] -
Hayek on Coercion
Disclaimer: So far as I know Hayek has never actually coerced a kitten. The idea of coercion is central to many strands of Libertarian thought, held up as the summum malum and opposed to voluntarism. But to actually define coercion precisely enough to build a political theory on it is a bit trickier. In general, [...] -
The History of Gold and the Future of Bitcoin
Yesterday I looked briefly at Bitcoin in the context of various conceptions of money. Today, with the benefit of having an actual Bitcoin economy to look at, I’d like to expand on that with a more thorough analysis, and some prediction thrown in for good measure. First of all, a strict distinction between token money and specie money is, well, specious. Hayek explains. . . -
Bitcoin and the Denationalisation of Money
Last month I wrote about Hayek’s and Rothbard’s conflicting monetary ideals. Much of the difference between their visions can be chalked up to differing predictions, but Rothbard’s prescription involves one important proviso that Hayek’s does not – namely, the institutionalization of the 100%-reserve warehouse receipt model of money. It was the failure of Rothbard to [...] -
Hayek vs. Rothbard on Free-Market Money
Within Austrian economic theory, there is a fundamental philosophical split between the “evolutionists” following Hayek, and the “moralists” following Rothbard. The former see the world in terms of dynamic, spontaneously ordering evolution of norms, where the latter see the world in terms of fixed and universally applicable ethical norms. This is perhaps a simplification, but [...] -
Culture and Laws
Economists are taught to take economic values as an ultimate given. But political values are different. Where my neighbor’s economic values affect me only in diffuse and necessary ways, his political values have the potential to affect me in very unnecessary ways. But the justice of any particular law cannot be decided based on a standard of coercion, for coercion itself is a slippery standard. “[A] continuum . . . inheres between private, voluntary agreement and coercive local government.” . . . -
Laws Destroying Lives: The Economics of Trafficking
Human trafficking is the biggest form of slavery in history. But sometimes it seems half the battle in the anti-trafficking movement is fighting despair within its own ranks. Fighting trafficking head on is like plucking leaves off a vine of ivy. But durable institutional solutions do exist. when we look at the types of labor demand supplied by trafficking, we can see a pattern emerge… -
Right and Duty
Most modern political philosophy is built upon the first principle of human rights. Of course, even from this starting point, political philosophies diverge wildly on what they consider among those rights. Clearly one cannot have an enforceable right to everything. In principle, there must be a way to distinguish useful and beneficial rights from unnecessary or even harmful ones… -
Law
What we mean by “law” is a question germane both to religious and political philosophy. In some sense, it just seems to mean “necessity”. This seems to be the usage in Romans 7:23, where Paul talks about “another law” in his members waging war against the law of the Lord in his inner being: his [...] -
How the Federal Reserve Destroys the Environment
Isn’t it funny that environmentalists generally line up on the left on political discussions – the left, the side dominated by the Keynesian cult of consumption? Let me back up and explain what I mean. During the Great Depression, the economic theories of John Maynard Keynes came to prominence, mostly because of good timing. It [...] -
Why Don’t We Have an Ideal System?
For all the political and economic theories out there which claim to be the best, very few grapple with the question, if it is indeed good, why don’t we have it? Any consistent system must deal with this problem, because no system on earth even closely approximates an ideal type of any sort: we have [...] -
Metaphysics and Economics
Within believers in any economic-political system, there are those who justify it consequentially, and those who justify it morally: those whose justification is ex post, and those whose justification is ex ante. To be sure a good system will qualify via both metrics. But the question still remains of which route to take to convince [...] -
On The Orders of Beauty
The idea of beauty as the reduction of all particulars to a single head still allows for a dichotomy in the treatment of beauty; what I will refer to as the appreciation of first and second order beauty. First order beauty is the most common conception, simply because it is the most obvious. It is beauty in an object as such, and stops there: everything exists for a purpose, and executes its function in the best way possible… -
Art Culture and Spontaneous Order
The art world is a fascinating example of spontaneous order. Though the particular motives are different, like with the market, motive is indeed the key to art culture as spontaneous order. There are two axes on which we can describe the motive of artistry: first the artists’s with regard to himself, and second the artist’s with regard to his audience… -
The Origin of Group Instinct
Man is undoubtedly a social being. Nearly everything he does is in regard to another human being. Some have taken this observation so far as to say that it is a fundamental characteristic of human beings to fragment into competing groups. Certainly this tendency is found in all peoples across all times. Yet to say this is a fundamental characteristic of humanity fails to apprehend the core of the tendency… -
Democratic Despotism
Montesquieu described three distinct types of government: Republic, Monarchy, and Despotism. He makes salient the difference between Monarchy and Despotism: in a monarchy, the power of the sovereign is constrained, where in a despotism, the sovereign has total power to execute his every whim. Rather than making one threefold distinction, as Montesquieu does, it seems [...] -
Is Freebanking Inevitable?
Wired Magazine has a great article on the future of money. Its basic premise is that, like with the media industries, the internet and the global communication infrastructure will allow the market to cut out the middlemen that lubricated the market in its absence… -
Constitutions as Meta-Policy
In the late 1780s, a debate raged between the Federalists and the Antifederalists on whether a bill of rights in a constitution would be sufficient, or even harmful, to individual rights. Ultimately the Federalists won and we got a bill of rights, on the condition that there be a general liberty amendment… -
Systems of Supremacy: Democracy vs. Capitalism
Socialists, Syndicalists, and other collectivist groups will often posture their system as one of worker supremacy. They will also characterize Capitalism as a system of employer supremacy. This is not the truth, as if a system had to favor either employers or employees. Capitalism is rather a system of consumer supremacy – for both employee [...] -
The Implicit Contract
One of the main functions which the modern state has arrogated to itself in recent times, one which is almost universally viewed as legitimate now that it has become fully ingrained, is the setting of product standards. The FCC, FDA, USDA, CPSC, EPA, and other agencies constantly prevent countless products from ever even entering the [...] -
Against a Legislature
Though the intellectual picture for free markets may look rosy with the discredit of orthodox Keynesianism with the oil shocks of the 70s, the Washington Consensus in the 80s, and the fall of Communism in the 90s, a far more formidable foe now looms ahead: institutional momentum. A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury… -
Inflation & Exchange: In Defense of Backed Currency
It’s easy to look at the character of a currency pegged to a particular value (whether dollars or gold) as regulation, and a floating currency as letting the market have its say about the relative values of currencies. But this abdicates from money its role as the unit of exchange – the anchor by which all prices are reckoned. One might well ask, why does money need to be an anchor?… -
Worth, Identity, and Egalitarianism
Egalitarianism is in vogue in Western policy. From progressive tax rates to caps on executive pay, people like to see some sort of injustice in the fact that there are rich people and poor people. I will look here at the moral and philosophical presuppositions that are necessary to an egalitarian worldview. The egalitarian tends to justify leveling and redistributive policies on the basis of equal humanity. All men are created equal, they say, so why ought so much inequality prevail in our world?… -
Attitude To Business: A Call to Consumer Activism
We Libertarians and free market types very often allow ourselves to be defined by our opponents. Oppose regulation, they insinuate, and you are therefore in favor of all the dirty and devious practices a business might engage in. I’ve met more than a few who actually are. But opposition to regulation does not have to [...] -
Politics and Virtue: Positive and Negative Libertarianism
Why do we believe in liberty? Not as a question of natural rights versus consequentialism – that’s a different debate entirely. There are two ways to answer this question that cross the lines of the aforementioned argument: “I believe in liberty because I have faith in my fellow man that unconstrained, the market will drive [...] -
Consistent Socialism
If we want to go after inequality in opportunity as such, the way to do it is not by handing out healthcare and welfare and social security. These completely miss the fundamental engenderer of inequality by decades. The only consistent application of the Socialist ideal is to create and nationalize a child-raising industry, removing that right from their parents… -
Constructing a Spontaneous Order
For a long time in the Classical Liberal tradition, there has been a tension between rationally constructed systems (for example Mises’ a priori epistemology) and the antirational purely spontaneous orders proposed by Hayek. The former stresses the universality of human nature, but does not generally refer to a legal order without the assumption (Hayek would argue it is a poor one) that it can be rationally constructed. The latter emphasizes the limits of human knowledge, the uniqueness of human experience, and the futility of deliberate construction… -
Traffic Jams and the Free Market
Rush hour traffic in Raleigh gives the mind a lot of time to idly wander, and so was born a thought along the lines of Daniel Klein’s Rinkonomics: the trafficonomy.
Traffic jams are in fact a lot like the free market. This is not a pejorative comparison, as if we could alleviate the jam…
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A Microfederalist Manifesto
Q: What is the fundamental problem with government? A: It is unconstrained. There is no process to achieve the optimal amount of regulation or private sector intervention, and even if it is perchance achieved at one point, there is nothing to keep it there. The line between desirable and abuse of power is not in [...] -
The Ends of Institutions (Or, The Problem with Moral Theories of Government)
Institutions Versus Individuals Among political theorists, there is a debate among those who view the ends of government as protecting natural rights, and those who view its ends as promoting the maximum felicity of its citizens. The dichotomy may seem to be one of moral versus practical concerns, but so far as we define a [...] -
The Role of Physical Piracy in the Market Economy
In discussions about piracy, even among people who are otherwise ok with free piracy – downloading – those who copy CDs or DVDs and physically resell them on the black market are often condemned, to the point that there is a wide consensus on both sides that the outright prohibition of this sort of activity [...] -
The Effectiveness of Overthrow
Machiavelli, almost 500 years ago, had this keen insight on the apparent paradox that the stronger a government is, the easier it is to overthrow. He is of course speaking entirely from the perspective of conquering it as an outsider however – I intend to generalize the notion to include (and focus more on) the overthrow of the government from within… -
Do We Need a Government Healthcare System?
The American healthcare system is in trouble: costs are far too high. Not to the consumer – the average consumer pays only 16¢ on the dollar for medical expenses, after government and employers step in. The government pays for 50% of that, and even more for those on medicaid and medicare. The expenses are ballooning, far more quickly than many other areas of government expenditure (not including social security, of course). The government can’t pay a theoretical infinite sum in the indefinite future: something’s got to give. What are the causes of the ballooning costs?… -
A Theory of Social Capital
Why do people act the way they do socially? What makes one person gregarious and another reserved? Does economics hold the answer? The answer to the last one is, of course, “duh”. Applying economic principles to human behavior of all sorts yields all kinds of interesting results, especially if it’s not strictly economic behavior. So in the spirit of Freakonomics, we’ll look at the act of socialization through a microeconomic lens…
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The Shortcomings of Efficient Market Theory (And What They Mean for Investors)
the efficient-market hypothesis asserts that [prices in] financial markets already reflect all known information. It further states that it is impossible to consistently outperform the market by using any information that the market already knows, except through luck. -Wikipedia, Efficient Market Hypothesis Efficient Market Theory holds that because all investors are rational, this requires that [...] -
Comparative Government: A Thought Experiment
The news has been filled recently with stories like minimum wage jumping 70¢, or California banning trans-fats in restaurants, all ostensibly for the sake of the common employee/consumer. Things which sound nice and warm and fuzzy on the surface – who doesn’t want to help out the bottom rung of society, or to make Californian [...] -
The Model of Post-Copyright Incentive
Looking at the litigious tactics of the RIAA and MPAA, it’s becoming more and more apparent that this isn’t how a legitimate business model works. Scaring your consumers into buying your goods reeks of pre-Capitalist Monarchical tactics used to enrich themselves at the expense of their constituents, which is exactly what we see in these [...] -
Time Travel and Free Will
The concept of time travel has tantalized mankind for as long as there has been literature, and has become especially prominent in recent decades with the rise of Science Fiction as a genre. How can a past still vivid in memory or an inevitable future be completely inaccessible to us except for the instant in [...]